Chinese mills lift steel output in early June

Steel output by China's largest steelmakers

rose to a record-high pace in early June, as dry weather and Covid-19 delays push construction demand deeper into summer.

China iron and steel association Cisa member mills produced an average 2.109mn t/d of crude steel over 1-10 June, up by 0.8pc from 21-31 May and by 2.4pc from a year earlier, Cisa said. It tops the previous record high of 2.105mn t/d in mid-September 2019. Cisa data include more than 100 of the country's largest steel mills.

The faster pace comes after China's total steel output hit a record high in May.

Chinese steel demand is outperforming year-ago levels during the summer season, which usually sees additional mill maintenance and rainy weather slow construction projects. But this year unseasonably dry weather and the delay of projects by lockdowns have kept demand high.

China, with 1bn t/yr steel output, has emerged as the most active spot buyer of semi-finished and finished steel products, with demand depressed in other regions from Covid-19 lockdowns.

The Shanghai rebar price has risen by 5pc to 3,570/t ex-warehouse since early-February lockdowns spread through China and sent steel inventories soaring to new records in March. But mills have worked down these record stocks. Cisa mill inventories rose by 4pc to 13.82mn t over 1-10 June from 21-31 May and are up by 6.2pc from a year earlier, Cisa data shows.

China's rebar output rose by 9.1pc to 24.22mn t in May from a year earlier and by 1.3pc to 98.47mn t in January-May, data from the national bureau of statistics (NBS) released today show.

Hot-rolled coil and strip output rose by 6.1pc to 14.2mn t in May from a year earlier and by 7.9pc to 65.86mn t in January-May. Wire rod output rose by 3.8pc in May from a year earlier but was down by 1.5pc to 60.5mn t in January-May.

Run-of-mine iron ore output in May rose by 8.1pc to 74.64mn t from a year earlier, with January-May output up by 4.1pc to 336.96mn t, the NBS said.

China produced a record 996.34mn t of crude steel in 2019.

By Chris Newman

Cisa mills' average crude steel output mn t/d