China's pig iron output grows 3.2% y-o-y during Jan-May

China's production of pig iron increased by 3.2% on year to reach 374.7 million tonnes over January-May this year, according to the latest data released by the country's National Bureau of Statistics (NBS) on June 15. The growth in pig iron output was faster than the 1.6% on-year rise in China's crude steel output during the same period, Mysteel Global notes.

For May alone, however, domestic pig iron output dropped 4.8% on year to 77 million tonnes, the NBS data showed. On a per-day basis last month, production averaged 2.48 million tonnes/day, lower by 110,000 tonnes or 4.2% on month, Mysteel calculated based on the NBS data.

The reduction in pig iron output was mainly due to the maintenance stoppages many domestic steelmakers had observed early last month, Mysteel's survey showed. Over April 28-May 25, blast furnace (BF) capacity utilization among the 247 steel mills under Mysteel's tracking averaged 89.39%, lower by 1.89 percentage points from the average during May 31-April 27.

In the first half of last month, most domestic steelmakers were struggling with thin or negative margins as steel prices fluctuated at low levels, so more mills chose to rein in production to cut their losses, Mysteel Global learned.

Mysteel's other survey showed that among the 247 sampled BF mills, only some 24% of them had managed to earn some profits when selling their products as of May 11.

Meanwhile, the decline in domestic steel demand during the traditional slack month for steel consumption in May also curbed the steel mills' production, which in turn weighed on the prices of steelmaking raw materials such as iron ore and coke, Mysteel Global noted.

For example, China's coke market witnessed four rounds of coke price cuts during the past month, leading the national composite coke price under Mysteel's assessment to hit Yuan 1,963/t on May 31, a new low since October 12 2020.

Written by Anthea Shi, shihui@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com

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