China’s crude steel output hits a new high with 94.85 mn t in Aug ’20, up by 2% against the previous high of 93.36 mn t in Jul ’20. Also, the output was up by 9% as against 87.25 in Aug ’19.
Also, in Jan-Aug ’20 the output stood at 691.07 mn t, increasing by 4% over 664.03 mn t in corresponding months of the previous year.
Factors driving crude steel output-
- Robust domestic demand- Downstream demand was picking up after the reopening of markets post-COVID outbreak. Thus, better profit margins in the domestic market on improved demand pushed mills to produce more.
- Govt announced stimulus packages- Economic stimulus announced by the Beijing government for housing and infrastructure sectors to recover from the COVID-19 pandemic’s blow resulted in higher output. Meanwhile, the production curb announced in the Tangshan region from Jul ‘20 until Sep ’20 did not have a major impact on the capacity utilization and production of the steel mills.
Outlook- Output rates may come down on steel production curbs amid pollution control norms imposed in Tangshan and tightening financing conditions for property developers.
Leave a Reply