Steel production in China declines in October

China's steel production fell for the second straight month in October, down 0.4% from the previous month, official data showed on Monday, as production was cut due to environmental restrictions and forecasts of lower winter demand.

The world's largest steel producer produced 92.2 million tons of steel last month, up from 92.56 million tons in September, according to the National Bureau of Statistics (NBS). Although this figure is slightly lower than in the previous month, compared to October 2019, this figure is up 13%.

Average daily production in October was 2.97 million tons, below the daily record of 3.09 million tons recorded in September.

Production at steel mills is usually disrupted by “winter cuts” in the country, which mostly target the industrial sector in smog-prone northern cities - from November to March, when non-compliant factories are forced to cut production.

But these measures are not expected to have the same impact this year, as most mills have completed environmental upgrades.

According to the consulting firm Mysteel, the average weekly capacity utilization rate of blast furnaces at 163 Chinese plants in October was 84.3%, down from 84.6% a month earlier, but exceeding 79.1% in October 2019.

China produced 873.93 million tonnes of industrial metal in the first 10 months of the year, up 5.5% on the same period in 2019, according to the Bureau of Statistics.

The China Iron and Steel Industry Association said in October that crude steel production in China will surpass 1 billion tonnes in 2020 as the revitalized downstream sector fuels consumption.