China’s effort at reining in carbon emissions by enforcing production curbs on steelmaking is still in its early stages. However, the results are already surfacing.
Steel companies that are members of China Iron and Steel Association (CISA) – an overwhelming majority of mills in China’s huge steel sector – have recorded a decrease of 7.6% in average daily crude steel output in the 1-20 Aug’21 period compared to the same period last year, as per latest CISA data accessed by SteelMint.
CISA figures show that China’s total crude steel output in the first 20 days of Aug’21 stands at 42.52 mn t – down 0.8%, m-o-m. Crude steel production in mid-Aug was 21.37 mn t, while daily output was 2.13 mn t.
Compared to the corresponding period of 2020, daily crude steel production has shrunk by over 1% in mid-Aug’21, while daily finished steel and pig iron production have decreased by 0.3% and 1.8%, respectively in the same period.
However, China’s finished steel production reached 40.4 mn t in the first 20 days of Aug’21, as daily output touched a little over 2.02 mn t – a straight decline of 8.6% vis-à-vis the daily output in the corresponding period last year.
Inventory levels
A vital metric of steel consumption that sheds light on the overall Chinese economy, the Middle Kingdom’s steel inventory, as monitored by CISA, stands at 14.9 mn t in the 1-20 Aug’21 period –up 8.1% compared to end-Jul.
However, steel inventory shows a marked rise of around 28% compared to Jan’21. Compared to the same period last year, steel inventories with mills monitored by CISA have increased 8.8%. Bearish sentiments are expected to spread across global markets as China’s steel inventory rises, along with negative sentiments in that country’s construction sector.
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