Most Chinese steel centers report production growth

Improved domestic steel market sentiment in June saw seven of China's top ten steelmaking provinces post annual gains in crude steel production, according to the latest data released by the country's National Bureau of Statistics (NBS).

Although the impact of hot and humid weather on consumption continued in June, the profitability of steel companies in large domestic steel regions improved last month, forcing plants to resume operations or ramp up production, market sources said.

By the end of June, 64% of the 247 blast-furnace steel mills estimated by Mysteel were able to make some profit, much higher than the 32.9% of steelmakers who said they made a profit in May.

A rebound in finished steel prices in June boosted profits, with the daily price of HRB400E 20mm rebar in China, an indicator of domestic steel market sentiment, averaging 3,826 RMB/t ($532.7/t) , including VAT at a rate of 13%. month, up 39 yuan per ton from May, according to Mysteel tracking.

Meanwhile, steel market sentiment in the country also improved in June, leaving most steel production centers busier, the sources added.

For example, the Chinese Purchasing Managers' Index for the domestic steel industry hit 49.9 in June, while PMI rebounded 14.7 percentage points on the month after a three-month decline, the CFLP Index official Steel Logistics Professional Committee noted at the time. .

However, according to NBS, three of the ten largest steel centers were still closed in June.

For example, steel production in the country's largest steelmaking region, northern China's Hebei Province, fell 3.47% year-over-year in June to 19.95 million tonnes, with industry observers citing a shutdown of local steel mills.

At the end of June, most steel mills in Tangshan, Hebei's major steel production hub, received orders from local authorities to stop operations to help reduce deteriorating air quality in the city, according to Mysteel Global.

A survey conducted by Mysteel among 35 section rewinders in Tangshan showed that as of June 26, their productivity had rapidly dropped to around 15%, compared to an average of 40.4% recorded on June 21.

Meanwhile, slightly fewer regions could boast production growth over the six months, NBS data shows, with only six of the top ten steel-producing provinces posting an annual increase in crude steel production in January-June.