Steel production in China in early November decreased by 20%

According to the China Iron & Steel Association, daily crude steel production in China in early November was 20% lower year-over-year, slightly above the October average.

Industry sources expected China's steel production to remain low through November-December, but said it could rebound in early 2022 after steelmakers complete the mandatory production cuts by the end of December.

According to CISA estimates, China's daily crude steel production averaged 2.343 Mt /d from November 1-10, up 1.5% on October but still the second lowest level since March 2018. ...

In addition to weak demand for steel, China's mandatory requirements to keep steel production in 2021 at 2020 levels were the main reason for low steel production.

Steel mills in northern China, especially in Hebei province, will continue to cut winter steel production between January and March 2022, but other parts of China may be allowed to increase production to at least a year ago.

Hebei has pledged to keep steel production from January 1 to March 15 at 70% of the level in the same period in 2021. Production at this level during these three months, if realized, will be above the current level.

According to sources, the average utilization rate of blast furnaces in Tangshan and Handan cities in Hebei province, two major steelmaking centers in China, was below 65% and 70%, respectively, as of mid-November.

Meanwhile, concerns about oversupply came amid expectations of weak demand from end users in the first quarter of 2022.

Market sources say that while real estate construction may deteriorate in the first quarter of 2022 due to poor home sales and land purchases in 2021, steel production, on the contrary, could increase.

Several sources have said that neither traders nor end users are interested in restocking as the steel market could continue its downtrend amid oversupply in the first quarter of 2022.

While daily crude steel production in early November was nearly 20% lower than the same period last year, cumulative stocks of finished steel in steel mills and spot markets monitored by CISA were still 0.1% as of 10 November. higher than a year earlier, and amounted to 22.91 million tons, which indicates a decrease. demand for steel continued to outstrip production demand.