China witnessed a 3.2% decrease in crude steel production during April compared to the previous month, while also experiencing a 1.5% decline compared to the same period last year, as stated by the statistics bureau on Tuesday.
The National Bureau of Statistics (NBS) reported that the world’s largest steel producer manufactured 92.64 million tonnes of steel in April.
According to NBS data, this output figure for April is lower than the 95.73 million tonnes produced in March and the 92.78 million tonnes produced during the corresponding month in 2022.
“While the month-on-month decline aligns with our expectations, we are somewhat surprised by the year-on-year decrease,” commented Pei Hao, a senior analyst based in Shanghai at the international brokerage firm FIS.
Reuters calculations, based on NBS data, indicate that the average daily steel output in April was approximately 3.09 million tonnes, which remained relatively unchanged compared to March and April 2022.
A survey conducted by consultancy Mysteel revealed that only 26.41% of the 247 steel mills surveyed were operating profitably by the end of April, a significant drop from the 54.55% reported at the beginning of the month.
In response to rapid price declines and to ensure stable cash flow, the government-backed China Iron and Steel Association (CISA) called for domestic steelmakers to reduce production.
Reports from consultancy Mysteel and Shanghai Metals Market (SMM) noted that certain steelmakers in northwest and northern China had initiated maintenance work on blast furnaces due to financial losses.
Pei Hao further explained, “The electric-arc furnace-based steelmakers experienced noticeable declines in capacity utilization rates during April. Additionally, some mills implemented production restrictions in the latter half of the month, resulting in month-on-month decreases in hot metal output.” Hot metal output is a significant indicator of iron ore demand, often generated through blast furnace processes.
NBS data revealed that China’s crude steel production reached 354.39 million tonnes in the first four months of this year, marking the highest output for this period since 2021, with a year-on-year increase of 4.1%.
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