July was a difficult month for China's steel industry. Production fell by 9.5% compared to June to 82.94 million tons. Compared to the same period last year, this represents a 9% decline, indicating a significant slowdown in the sector. The average daily production rate fell by 12.4% compared to June to 2.68 million tons, the lowest daily production level recorded so far this year.
Several factors contributed to this decline. Many local steel mills have undergone maintenance or reduced operations due to lower demand, especially for products such as rebar, and falling steel prices. The impact of lower steel production was also reflected in related sectors. Iron ore prices fell by around 3% to USD 93 per ton, the lowest level since the beginning of the year. The decline reflects the weakness in the market as the woes in the steel sector continue to put pressure on raw material costs.
Despite the current downturn, the Chinese government is committed to regulating the steel industry as part of its economic and environmental strategies. However, details on the scope and timing of future regulation remain unclear.
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