China's early Nov daily steel output at 20-month low

Daily crude steel output among the 247 Chinese blast-furnace and 71 electric-arc-furnace mills under Mysteel's regular survey continued retreating over the first ten days of November to hit a 20-month low of 2.48 million tonnes/day, down by another 92,700 t/d or 3.6% from late October's average. Survey respondents cited the on-going production curbs and shrinking profit margins of domestic steel mills to explain the dip.

In early November, steel producers in Tangshan in North China's Hebei province still faced stricter curbs on their blast furnace and sintering operations as requested by local government to improve air quality. The curbs, imposed from October 27, resulted in a further decrease in domestic crude steel output, even though the restrictions were lifted from November 7.

Mysteel's other survey showed that capacity utilization among the surveyed 247 BF mills declined for the third week over October 29-November 4 to 76.43% on average, down another 2.4 percentage points on week and hitting the lowest since October 4 2019.

At the same time, falling finished steel prices and the lackluster demand from end-users aggravated the negative sentiment in the domestic market and dampened Chinese mills' enthusiasm for production, given that their profit margins had been squeezed significantly, Mysteel Global noted.

For example, as of November 10, China's national price of HRB400E 20mm dia rebar under Mysteel's assessment had dropped to a 7.5-month low of Yuan 4,790/tonne ($748/t) including the 13% VAT, lower by Yuan 571/t from the end of October.

China has entered the traditional off-season for steel consumption with temperatures falling in northern China. Over November 1-10, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 traders Mysteel follows averaged 166,957 t/d, still a very low level though it had recovered slightly by 2,777 t/d or 1.7% from the average for late October.

Written by Nancy Zheng, zhengmm@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.