China's crude steel output down 6.5% on year in H1 CY'22

For the first half of 2022, China's total crude steel output posted an on-year fall of 6.5% on year to 527 million tonnes, according to the latest data released by the country's National Bureau of Statistics on July 15.

For June alone, China produced 90.7 million tonnes of crude steel, down 3.3% on year, and the country's daily crude steel output reached 3.02 million tonnes/day on average, down 3% from that for May, Mysteel Global calculated based on the NBS data.

The on-month decrease in June was mainly because many Chinese steelmakers including blast-furnace and electric-arc-furnace mills, conducted maintenance on their steelmaking facilities or slowed down their production pace last month, with further shrinking profit margins and sluggish demand from end-users, Mysteel Global noted.

The June result was in line with Mysteel's survey, which showed that the capacity utilization rate among the 247 blast-furnace mills across China had decreased for the second week to a two-month low of 87.61% over June 24-30, lower by 2.29 percentage points on month, and that among the 85 EAF mills witnessed a sharper fall of 18.79 percentage points during the same period to 35.59%.

Chinese steel prices maintained the downtrend in June with scarce sales in the physical market, exacerbating mills' losses and dampening their enthusiasm for production.

For example, as of June 30, the national price of HRB400E 20mm dia rebar was assessed by Mysteel at Yuan 4,387/tonne ($648/t) including the 13% VAT, down Yuan 399/t from the end of May.

Last month, the average gross loss on rebar sales among China's 91 BF mills under Mysteel's survey was at Yuan 317/t, deepening by Yuan 249/t from that for May, as reported.

Although Shanghai had lifted the COVID lockdown since June 1, the recovery in steel demand from end-users was slower than expected, due to frequent heavy rains in southern China and high temperatures in northern areas, placing more pressure on the domestic steel market, Mysteel Global learned.

For June, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among 237 Chinese traders under Mysteel's tracking averaged 155,960 t/d, only up by 1,807 t/d from the prior month.

China's finished steel output came in at 118.42 million tonnes in June, down 2.3% on year, and the country's total production for the first six months registered 667.14 million tonnes, lower by 4.6% from the same period last year, according to the NBS data.

Written by Nancy Zheng, zhengmm@mysteel.com

Note: This article has been published in accordance with an article exchange agreement between Mysteel Global and SteelMint.