China produced 779Mt of crude steel in 2013, up 7.5% according to the National Bureau of Statistics (NBS). The average daily crude steel output figure for December 2013 was 2Mt, which was down 0.89% from November and the lowest for the year.

Crude steel output in December 2013 was 63Mt, up 6.5% year-on-year. Pig iron output for the year was up 6.2% year-on-year at 709Mt.

Steel circulation within China was down in December when compared with November figures. The Purchasing Managers’ Index for steel circulation stood at 47.5 in December, which was 0.2 down from the previous month. As a result, social stockpiles of steel increased in December as a result of few orders from end users.

Where China’s major steelmakers were concerned, average daily steel output stood at 1.7Mt between 11 to 20 January 2014, up 1.63% when compared with the previous 10 days, according to figures issued by the China Iron and Steel Association (CISA).

The daily crude steel output of China’s smaller producers is estimated to be 305kt between 11-20 January, accounting for 15.2% of total output, but down 0.9% when compared to the previous 10 days.

China’s Steel Price Index (CSPI) was at its lowest since 2006 and down 8.6% over 2012, averaging 102.76. By end December 2013 it was 99.14, down 0.19% when compared with November 2013. According to the CISA, the index has stayed below 100 for three consecutive months.

While steel demand has remained sluggish, CISA expects steel prices to stabilise as the Chinese government’s measures to cut surplus capacity kick in.

The 2013 price index for long steel was down 9.7% at 105.01; sheet steel fell 7.06% year-on-year to 102.36. By the end of December, the price index of long steel edged down 0.07% from November to 102.34 and sheet steel was down 0.09% to 97.86.

China’s steel consuming industries – general equipment manufacturing, railways, shipbuilding, aerospace and electrical machinery – were all down in December. Only automotive showed growth at 0.3 percentage points higher than in November.

Despite all the doom and gloom, China’s economy is expected to grow 7.5% in 2014 and China’s steel demand will be boosted by accelerated urbanisation, infrastructure and household construction.

Source: China Metals.