China’s crude steel production declined 0.2% MoM, or 1.1% YoY, to 51.64mn tons in August, extending its downturn for three consecutive months. Daily average output hit a yearly low at 1.66mn tons (vs. 1.85mn tons in April).
The sustained drop in the country’s crude steel production is attributable to worsening profitability on high feedstock prices and weak product prices in June-July and a government-led steel industry restructuring (35.25mn tons of pig iron and 8.76mn tons of steelmaking capacity planned to be shut down) in August.
The government also announced on August 13 that it would restrict regional power supply, following its decision to close obsolete plants and limit bank loans to
small steelmakers.
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