Home Commodity News China’s crude steel output hits 33-month low as power rationing bites amid sluggish demand

China’s crude steel output hits 33-month low as power rationing bites amid sluggish demand

China’s crude steel output hits 33-month low as power rationing bites amid sluggish demand

China’s daily steel output in September dropped to the lowest level seen since January 2019, as power rationing dented steel production in at least 12 provinces amid sluggish demand from real estate and manufacturing sectors.

Market sources expect steel output to stay low through the final quarter 2021 and first quarter of 2022, with pig iron and crude steel production in 2021 almost certain to fall below 2020 levels for the first time since 2016.
Power crunch across China continues to dent steel production in October.

Meanwhile, steel mills across China still need to implement output cuts to some extent over October-December to ensure their 2021 crude steel output remains near 2020 levels.

Some sources said it was likely China’s steel output may rebound, especially in December, when power crunch should ease from current levels and most steel mills should have completed their output cut requirements by November.

But they expect any output rebound in Q4 2021 or Q1 2022 should be modest, as China’s winter output cuts program, spanning from Nov. 15 to March 15 aimed at reducing winter smog, requires steel mills in Hebei, Shanxi, Henan and Shandong “in principle” to keep their crude steel production at 30% lower than a year ago.

2021 pig iron, crude steel output lower

China’s September crude steel output dropped 21.2% on the year to 73.75 million mt, according to data released by National Bureau of Statistics Oct. 18. The daily crude steel output averaged 2.458 million mt/day, down 9.2% on month.

Over January-September, China’s crude steel output reached 805.89 million mt, up by 2%, or 15.8 million mt, on the year, according to NBS.

Meanwhile, China’s pig iron output in September decreased 16.1% on the year to 65.19 million mt. The daily pig iron output was down 5.8% on the month, to 2.173 million mt, the lowest seen since April 2020.

Over January-September, pig iron output was down 1.3% on the year, or 8.8 million mt, to 671.07 million mt.

If China’s daily crude steel output over October-December is kept at what it was in September, at 2.458 million mt/day, the country’s crude steel output in 2021 is set to fall 3% from 1.065 billion mt in 2020 to 1.032 billion mt, Platts calculations showed.

Sluggish property, manufacturing steel demand

China’s steel prices, however, may not gain much momentum from output cuts in Q4 and Q1, as domestic steel demand in property and manufacturing is likely to weaken further over the period, some steel traders said.

According to Platts calculations based on NBS data, China’s floor space of property new home starts in September fell 13.5% on the year. The total new home starts over January-September fell 4.5% on the year.

Moreover, tightened credit in property sector had also led land purchase over January-September to drop by 8.5% year on year. As a result, the new home starts are expected to fall even faster in Q4 2021 and Q1 2022. Property steel demand accounts for around 30% of China’s total steel consumption.

Meanwhile, power rationing across China forced manufacturing activity to contraction in September, according to NBS. Some steel market sources said power shortages will gradually ease in the coming months, but the key problem for manufacturing sector is the slow recovery in Chinese consumption.

Slowing property construction has dented manufacturing of engineering machineries, while sporadic occurrences of local COVID-19 cases have also slowed the consumption recovery, one source said.

The value of China’s consumer goods retail sales in September increased 7.8% from the same period in 2019, equivalent to a 3.8% annual growth, still far below the 8% annual growth in the full year 2019, according to NBS.

Although China is set to speed up issuance of local government bonds in Q4 to support infrastructure construction, most of the sources expected the fiscal support to take effect mainly in H1 2022, and it might not be enough to fully offset the downward pressure from property and manufacturing sectors.

NBS data showed the infrastructure fixed asset investment, or FAI, in September fell 7% on the year. The investment over the first nine months was just 1.5% higher on the year. Steel demand in infrastructure accounts for around 20% of China’s total steel consumption.
Source: Platts

Source

LEAVE A REPLY

Please enter your comment!
Please enter your name here

actress jyothi orgymovs.info telugu aunty xvideos hinbi sax ganstavideos.com sexxx vdo مقاطع سكس امهات felltube.com افلام جنسية مترجمة عربى dasesaxe xxxhindiporn.net porn video 3gp xxxnew pinkpix.net bangladeshi blue flim
www com xxx vdeo tubepornfilm.mobi freshpornclips نيك حامد freesextube.org ام تتناك india sex live bigassporntrends.com hidi xxx com bukkake comics hentaiclan.com supergirl hentai comic سكس حفله muarab.net نيك من السباك
ng bahay pinoyteleseryelove.com deped laptop mallu actress hot video dirtygfs.net london sex video brawling go 112 hentaihug.com sister cleaire karla estrada children replayteleserye.com gagamit سكس ميا arabianporns.com شم طيز