CISA: China’s Late Jan Daily Steel Output Grows 0.9%

Daily crude steel output among the 97 major steelworks members of the China Iron and Steel Association (CISA) increased steadily over the last eleven days of January, with the tonnage up 18,200 MT/day or 0.92% from the prior ten days’ average to 1.99 MnT/d, the highest since late November, according to the association’s latest release on February 10.

Based on this data, CISA estimated that daily crude steel production for the whole country averaged 2.67 MnT/d over January 21-31, seeing a rise of 14,900 MT/d or 0.56% from the average for January 11-20.

With the steady growth in steel production, for the whole of January daily crude steel output among CISA’s member steel mills reversed up to 1.98 MnT/d after a short-lived decline in December, increasing by 48,500 tonnes or 2.5% on month, Mysteel Global calculated based on the data released by CISA.

The rebound indicated that many Chinese steel mills kept normal production last month, even though the domestic steel market had quietened and steel demand from downstream users had almost slid to zero ahead of the Chinese New Year holiday starting from January 24, Mysteel Global notes.

Mysteel’s survey among 247 blast furnace steel mills across the country showed that the average blast furnace utilization rate hit a six-week high of 80.01% over the January 17-22 period (the last survey before the CNY holiday), gaining 1.02 percentage points from one month earlier, according to Mysteel’s database.

However, the steady steel output at a time when demand from steel users remained essentially frozen resulted in steel stocks held both by domestic steel mills and traders increasing substantially during the January 24-February 2 CNY holiday, Mysteel Global notes.

Mysteel’s survey showed that as of February 2, stocks of the five major steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate at traders’ warehouses in the 35 major cities under Mysteel’s weekly survey totalled 15 MnT, up 27% from that before the CNY holiday. At the same time, total inventories at the 184 steelmakers across China Mysteel tracks reached 8.3 MnT as of February 2, surging by 55.1% compared with that before the long holiday, according to Mysteel’s database.