Amidst strong conviction that China’s steel output is headed for contraction, country’s crude steel output has reported an increase of 2.6% in Aug’16 against previous month.
The same is recorded at 68.57 MnT in Aug’16 against 66.80 MnT in Jul’16. This signals that the production cuts that has happened in Jul’16 was just a temporary phase induced from pollution control measures before the G-20 summit that was conducted in first week of Sep’16 in Hangzhou city of China.
In the month of August, steel prices in China have registered an increase of 5% whereas its export prices have recorded a plunge of 11%. This price rally must have demotivated Chinese steel makers to cut production.
It has been reported that in Aug’16 Chinese mills have reported profits of USD 45-60/MT, highest since 2014 and blast furnaces operated at 81% capacity.
As far as demand is concerned, country’s peak season starts from September after the summer lull. However, steel prices in country have slid in first two weeks of Sep’16 amid domestic market weakness, indicating poor demand. Thus, the trend of China’s steel output in the month of September remains uncertain.
If Y-o-Y comparison is done, China’s crude steel output is up by 2.41% in Aug’16 against Aug’15.
In first eight months of 2016 from Jan-Aug, country’s crude steel output is recorded at 537.09 MnT, down by 0.65% against corresponding period of previous year.
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