China's crude steel production increases by 1.6% y-o-y in Jan-Feb'24

China's crude steel output for the first two months of 2024 was 167.96 million tonnes (mnt), up by 1.6% y-o-y, according to the National Bureau of Statistics. This comes despite low-demand and maintenance work at steel mills.

The daily average crude steel production reached 2.799 mnt, reflecting a significant increase of 28.7% compared to December 2023.

Factors affecting output

Impact of policy shift: The Chinese government prioritised economic support and reviving the property sector in 2023, which contributed to the stabilisation of steel output. Strong demand from shipbuilding, solar, and automotive sectors helped offset the decline in demand from the struggling property sector.

Rise in China's steel export: China's steel exports witnessed a significant jump in the first two months of 2024. The export surged by 32.6% y-o-y to reach 15.91 mnt compared to the same period in 2023. This increase comes amid a decline in domestic steel demand, prompting China to boost exports and sell steel competitively in international markets.

Outlook: China's steel production is expected to slow down in 2024. While the lack of emission caps in 2023 helped stabilise output. This decline can be attributed to oversupply from increased production in 2023 coupled with weak profit margins may lead mills to cut back. Additionally, the property sector, a key consumer of steel, is unlikely to see a major rebound, further dampening demand. This slowdown is already underway, as evidenced by the decline in December's crude steel production.