China's pig iron and crude steel output is expected to continue falling in August as steel mills extended production cuts in response to weak demand and rising inventories. The slowdown in demand has led to volatile steel prices and reduced spot market activity. On August 6, the Chinese HRC price fell by 30 Yuan (USD 4.2) to 3,430 Yuan (USD 479) per ton, while the rebar price dropped by 20 Yuan (USD 2.8) to 3,230 Yuan (USD 450) per ton.
Between July 21 and 31, China's daily pig iron production averaged 2.247 mt, a 5.7% decrease from mid-July. During the same period, crude steel output averaged 2.667 mt, down 5.9%, as reported by the China Iron and Steel Association (CISA) on August 6.
Despite broader output cuts, the reduction in China's finished steel inventories has been slow, indicating tepid end-user demand, according to trade sources. As of July 31, finished steel inventories at steel mills and major spot markets monitored by CISA totaled 26.45 mt, down 1% from July 20. However, this figure is up 5.4% from the end of June and approximately 10.7% higher compared to the previous year.
Further production cuts are anticipated as more steelmakers plan maintenance works on blast furnaces, which could reduce pig iron output by 1.16 mt in August from the late July levels, according to industry sources. Trade sources expect that production cuts will expand later in August due to thin margins, with only a modest recovery in seasonal demand anticipated in September and a generally poor outlook for the remainder of 2024.
Comments
No comment yet.