The country produced 1.9606 million tpd of crude steel during the last eleven days of December, down 2.67% from the preceding ten days, according to data released by the China Iron & Steel Assn (Cisa) on Thursday January 9.
Output of Cisa member mills, which are mainly medium-sized to large steelmakers, averaged 1.6384 million tpd in late-December, down 3.18% from mid-December.
“Subdued steel demand and high raw materials cost have squeezed mills’ profit margins, which led some to cut production,” a northern Chinese mill source told Steel First.
Eastern Chinese rebar prices were at 3,460-3,500 yuan ($567-573) per tonne including VAT on December 31, down 90-120 yuan ($15-20) per tonne from prices on December 20, according to Steel First’s price archive.
Tighter pollution controls since November could also be part of the reason for the production decline, a Shanghai-based analyst said.
The average of Cisa’s three production figures for December comes to about 1.991 million tpd, down 6% from the average of the previous month.
Cisa member mills’ combined inventory of finished steel totalled 12.8745 million tonnes as at December 31, down 948,000 tonnes or 6.86% from December 20 levels, according to Cisa figures. But stockpiles were up by a significant 23.1% compared with those at the beginning of the year.