As per the recent data released by NBS (National Bureau of Statistics), Chinese crude steel output recorded 6 months high at 85.03 MnT in Apr’19. Prior this last record was made in the month of Oct’18 at 82.55 MnT. Thus higher steel prices in domestic market along with strong demand lead to surge in nation’s crude steel output.
On monthly basis China’s crude steel production ascended by 6% in Apr’19 to 85.03 MnT which was 80.33 MnT in Mar’19.
On yearly basis nation’s crude steel output surged by 11% in Apr’19 against 76.69 MnT in same month of previous year.
During first four months of CY’19 (Jan-Apr) China’s crude steel output stood at 314.94 MnT up by 9% which was 289.47 MnT in similar time period of previous year.
Higher steel prices amid improved demand lead to increase in crude steel output- In the month of Apr’19 nation’s domestic steel prices remain high as mill were restocking material amid May day holiday. Meanwhile increased construction activities and real estate investments along with improved demand from railways, shipbuilding, aerospace, automobile and equipment manufacturing pushed Chinese steelmakers to increase crude steel output.
Profit level of steel mills in China continue to remain optimistic during Mar and Apr’19 as many projects were under construction stimulating demand for steel. Meanwhile VAT rate also reported decline in its value-added tax rate from 16% to 13% for most industries and from 10% to 9% for the transport and construction sectors.
Outlook in May’19- Tensions between USA and China deepens which resulted to gloomy outlook for Chinese steel market since steel prices started falling and demand remain lacklustre.
Also, in purview of environmental concerns, crude steel output may witness a slowdown amid production cuts in Tangshan province. The city plans to reduce the number of local steel and iron companies to below 30 from the current 38 by 2020 and below 25 by 2025.
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