Dec 17, 2020
China’s largest mills raise steel output to new record
2021-01-14
China iron and steel association (Cisa) member mills increased crude steel output to a record high in early December as they skipped winter maintenance to help fill a global supply gap.
Cisa mills produced an average 2.203mn t/d of crude steel over 1-10 December, up by 4.6pc from 21-30 November. Cisa data include more than 100 of the country's largest steel mills. Some of the increases are attributable to new members this year, but its trend is a good indicator for official monthly data published later.
China's November crude steel output of 87.7mn t slowed by 4.9pc from October but rose by 8pc from a year earlier, taking January-November output to 961.16mn t.
Cisa mills' steel inventories rose by 11.5pc to 12.68mn t in early December from late November, Cisa data show. The inventory level has been volatile at near its post-Covid-19 lows. The stocks rose to an all-time high of 21.34mn t in February.
China's steel output typically slows during the winter lull in construction, but Asian steel supply has tightened from a shift in seaborne steel flows to Europe and the Americas, where mill restarts have lagged demand. China's steel exports accelerated by nearly 10pc in November.
Shanghai hot-rolled coil (HRC) prices have risen by 11.6pc to 4,530 yuan/t ($690/t) since 1 September. The fob China HRC index moved up by 24pc to $641/t over the same period, pulled higher by overseas markets including the US Midwest HRC index that rose by 77pc to $920/short ton and northwest European HRC that increased by 42pc to €640/t over the same period.
By Chris Newman
Source: Argus
