Chinese steel companies' daily pig iron output is expected to decrease to an average of 2.38 million tonnes per day this month as mills are forced to cut finished steel output.
Last month, pig iron output decreased to 2.39 million t/day on 18 May as steel mills cut steel output. Production then increased moderately to 2.42 million t/d on 25 May, while the total volume for the whole month was 2% lower than the previous month.
Recently, some mills have reportedly decided to restart their blast furnaces after maintenance work to benefit from the modest increase in steel margins.
As of 25 May, about 34.2% of steel mills made some profit from the sale of finished steel, up 7.8% from the previous month.
Daily pig iron output of most steel mills decreased this month as China's central government is expected to formally reform its policies in a few years and tell mills that the country's total crude steel output this year should not exceed that of last year.
In addition, it is estimated that more steel mills are at risk of losing more money on finished steel sales in mid-June due to lower steel consumption, so many of them will voluntarily choose to cut steel output again.
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