China's steel production continues to decline amid rising exports

In the first five months of 2015, crude steel production in China was 340.170 million tonnes, down 1.6 percent year on year, according to a statement from the China National Development and Reform Commission (NDRC). And the June growth rate is 4.3 percentage points lower than in the same period last year.

In the first five months of this year, the output of metallurgical coke in China as a whole amounted to 187.81 million tons, which is 2.8 percent lower on the annual level. Cumulative production of ferroalloys from January to May amounted to 14.35 million tons, down 3.4 percent year on year. Meanwhile, in the first five months of 2015, China's finished product exports totaled 43.52 million tonnes, up 28.2 percent year on year. In May, China exported 9.2 million tons of metal products, up 7.73 percent over the previous month and 14 percent more over the same period last year.

Steel exports in monetary terms in May totaled $ 5.338 million, down 16.24 percent year on year, but up 1.89 percent from the previous month. The total value of exports in January-May amounted to $ 27.42 million, which indicates an increase of 1.8 percent compared to last year. At the same time, the average export price was $ 580.22 per ton in May, which is 26.53 percent lower on an annualized basis and 6.42 percent lower than in the previous month.

However, in recent years, smelters have continued to increase their steel output despite high inventories and an oversaturated market. Daily steel production at key Chinese steel mills increased 1.59 percent from May, according to the China Iron and Steel Association (CISA). China's daily production in June is estimated at 2.285 million tons, up 0.7 percent from May. At the same time, CISA predicts further decline in prices, as demand for steel may continue to fall during the summer.