China: Steel inventories at CISA-affiliated mills rise in mid-Sep'24

• China's steel inventories decline m-o-m, y-o-y
  
  
• Output rises from early-Sep'24 but falls y-o-y
  
  
• Rising inventories hint at slowdown in demand
  
  

The China Iron and Steel Association (CISA) reported that the total steel inventory at key enterprises reached 15.65 million tonnes (mnt) in mid-September 2024. This represents a rise of 4.5% or 680,000 tonnes (t) from 14.97 mnt in early-September 2024. However, inventory levels fell by 800,000 t or 4.9% m-o-m against 16.45 mnt in mid-August 2024. Moreover, compared to mid-September 2023, inventory levels decreased by 110,000 t or 0.7% y-o-y compared to 15.75 mnt.

Production volumes

The average daily crude steel output of CISA-affiliated mills stood at 1.98 mnt in mid-September 2024, an increase of 2.7% from 1.93 mnt in early September 2024. However, output remained range-bound m-o-m and declined 6.8% y-o-y from 2.13 mnt in mid-September 2023.

The average daily finished steel output stood at 1.93 mnt, up by 3.6% from 1.86 mnt in early September 2024. However, the same dropped by 8.3% y-o-y.

The average pig iron output stood at 1.81 mnt in mid-September 2024, an increase of 1.6% as compared to 1.78 mnt in early September. However, on a y-o-y basis, the same decreased by 7.3%.

Outlook

The rise in inventory levels indicates a potential slowdown in demand, as producers are struggling to sell off their stock. While the upcoming National Day holidays in China (1-7 October) could lead to a temporary increase in sales, the industry faces ongoing challenges of excess inventory and global economic instability.