China's crude steel output rises 2.9% y-o-y in Oct'24 amid stimulus measures

• Stimulus shots boosts demand, margins
  
  
• Steel exports increase healthy 41% y-o-y
  
  

China's crude steel production in October 2024 stood at 81.88 million tonnes (mnt), reflecting a 2.9% rise compared to 79.09 mnt in October 2023, as per data from the National Bureau of Statistics (NBS). Moreover, the same increased by 6% m-o-m against 77.07 mnt a month ago.

However, crude steel production in January-October 2024 edged down by 3% y-o-y to 850.73 mnt compared to 876.97 mnt in the corresponding period last year (CPLY).

Factors behind rise in production

Stimulus measures boost demand: China's recent economic stimulus measures, implemented ahead of the National Day holiday, have significantly boosted demand for steel across various sectors. This surge was primarily driven by increased construction and infrastructure sector activity, and manufacturing output. Furthermore, the stimulus measures have improved profit margins for steelmakers, making production more profitable. Additionally, October is historically a strong month for steel production in China, as demand typically increases ahead of the winter season.

Rise in Chinese steel exports: China's steel exports rose by 40.8% y-o-y to 11.182 mnt in October 2024 compared to 7.73 mnt in October 2023. This significant uptick in exports was primarily driven by the highly competitive pricing of Chinese steel products in the global market. Furthermore, robust domestic demand for steel products, particularly from sectors such as construction and infrastructure, contributed to increased production and exports.

Outlook

China's crude steel production is expected to remain robust due to continued economic stimulus measures, increased seasonal demand ahead of winter, and competitive export pricing. Additionally, domestic demand is likely to stabilise, supported by ongoing infrastructure projects, manufacturing output, and construction activity.