China’s steel output hits new record high in August

Shanghai, 15 September (Argus) — China's crude steel output hit a new record high in August as firm domestic demand extended into the traditional late summer low season.

Crude steel output stood at 94.85mn t in August, up by 1.6pc from July and higher by 8.4pc from a year earlier, according to data from the national bureau of statistics.

Average daily crude steel output increased by 1.6pc to 3.06mn t/d from 3.012mn t/d in July.

Total production in January-August rose by 3.7pc from a year earlier to 688.89mn t. August output equated to 1.1169bn t/yr on an annualised basis.

The higher steel output arose from still-strong downstream demand even as the country entered the late summer low season that is typically marked by maintenance outages. Covid-19 lockdowns delayed factory restarts and construction projects to push forward demand this year.

Hot-rolled coil (HRC) prices in Shanghai rose by 100 yuan/t ($14.74/t) last month to Yn4,050/t ex-warehouse. Shanghai rebar prices increased by Yn80/t to Yn3,700/t ex-warehouse in the same period.

The record output has supported feedstock prices, especially for iron ore, hitting six-year highs in August and again this month. The Argus ICX 62pc index hit a new six-year high of $130.55/dry metric tonne (dmt) on 3 September, while the 65pc index climbed to a new six-year high of $144.40/dmt yesterday.

The strong domestic steel demand and relatively weaker seaborne demand lowered China's steel exports by 26.6pc to an eight-year low of 3.68mn t in August as mills directed more supply to meet robust domestic steel demand.

The Argus fob China HRC index rose by 6pc, or $29/t, to $511/t in August.

Pig iron output increased by 5pc from a year earlier to 78.18mn t in August and rose by 0.47pc from July. January-August output increased by 3.4pc on year to 589.4mn t.