China: Steel inventories at CISA mills decline in late-Feb'24

The China Iron and Steel Association (CISA) reported steel inventory of key enterprises in late-February 2024 stood at 18.020 million tonnes (mnt), a decrease of 959,000 tonnes (t) or 5.05% compared to 18.978 mnt in mid-February. Moreover, inventories rose by 5.82 mnt or 47.71% m-o-m compared with 12.199 mnt in late-January. In addition, inventories increased by 3.44% y-o-y or 6,00,000 t compared to 17.410 mnt in late-February 2023.

Production volumes

The average daily crude steel output of CISA-affiliated mills stood at 2.130 mnt in late-February, an increase of 1.43% from 2.100 mnt in mid-February. Also, output rose by 5.7% m-o-m against 2.016 mnt in late-January. In addition, output dropped by 4.06% y-o-y against 2.220 mnt in late-February 2023.

The average daily finished steel output stood at 2.065 mnt in late-February, up by 4.03% from around 1.985 mnt in mid-February this year. Moreover, production decreased by 8.62% y-o-y.

The average daily pig iron output stood at 1.877 mnt in late-February, down by 1.42% m-o-m; moreover, the same declined by 6.23% y-o-y.

Outlook:

The Chinese steel market is emerging from its seasonal slowdown. While the Spring Festival holiday is over and warmer weather approaching, construction activity is picking up as migrant workers return and projects resume. However, demand recovery is uneven, with some areas seeing more activity than others. While supply is gradually increasing to meet this demand, the overall market remains in a state of "weak recovery in demand and gradual growth in supply". This suggests a slow but potentially steady improvement in the near future.