China’s 2013 crude steel output is likely to reach 784Mt, according to figures released by the China Iron and Steel Association (CISA), and could reach 800Mt in 2014 – based on an estimated GDP growth of 7.4%.
The figure for the month September 2013 was 65.4Mt, a rise of 11% on the same period last year, and the total for the period January to September was 587.3Mt, up 8% on the previous year.
Daily crude steel production has been topping 2Mt since February, but domestic stocks of five major steel products in 22 cities stood at 11.5Mt, reflecting waning demand.
Out of all the major Chinese steel producers, Hebei Iron and Steel reported daily output down by 8.8kt between October 11-20 while Wuhan Iron and Steel was down by 8kt and Xilin Iron and Steel was down 6.3kt.
The stockpiles of major Chinese steelmakers stood at 13.7Mt on 20 October, up 2.2% from 10 days earlier (10 October).
Delays in order fulfilment and declining steel exports were behind Chinese production cuts and with profits dwindling and losses rising, many producers are engaged in plant overhauls to temporarily reduce production.
Exports are being adversely affected by a slow economic recovery, increased protectionism and international trade friction, according to Zhang Changfu, vice president of CISA.
China exported 4.92Mt in September and 46.9Mt between January and September, but the average price of steel exports during the period was down 13.4% at US$827/tonne.
The expected utilisation rate of high-end steel production capacity in China is 80%, but only galvanised steel plate, steel bar and reinforcing steel bar have exceed ed that figure. Section steel, thick and medium steel and hot-rolled strip steel are all below 70%.
Steel traders are dispensing with the practice of hoarding steel for delayed sales, preferring instead to encourage direct delivery to end-users. Direct deliveries rose by 11.5% when compared with 2012 and accounted for over 35% of all kinds of steel distribution in China.
Source: China Metals.