China’s crude steel output increased by 4.5% y-o-y in June to 91.58 mn t as the recovery of steel production and demand has been quick after a coronavirus-related lockdown was lifted in May.
Monthly output in June was, however, lower by 1% from 92.2mn t in May, according to the National Bureau of Statistics data.
Cumulative Jan-June output was higher by 2% at 502.8mn t.
A robust turnaround in industrial and construction activity in China, aided by government’s measures to stimulate the economy, has seen China’s steel demand and imports surge while iron ore prices touched a 1-year high this week.
Pig iron output, which correlates highly with iron ore use in the furnace burden, gained by 4.1% on-year in June to 76.64mn t.
The pace of crude steel output is unlikely to slow down in the near-term, though production curbs in Tangshan imposed from 1 July may curb production to some extent. But mills sometimes increase the proportion of scrap in the converter burden and use higher-grade ores, including more lump and pellet, to keep output at normal levels if restrictions are placed on blast furnaces and sintering operations. July rains in parts of China seasonally affect construction work to some extent, slowing demand, though mills typically do not reduce output until there is a material impact of a demand slowdown on profitability.
Leave a Reply