The steel industry in China has been mired in a slowing economy that grew just 7.7% y-o-y in the first 9-months. The industry’s combined profits plunging 53.4% from the previous year to RMB 82bn (US$12.8bn) in the January-August period, according to data from the National Development and Reform Commission (NDRC).

China’s stocks of steel products, including rebar, wire rod, hot-rolled steel, cold rolled steel and heavy and medium plates fell 95kt, or 0.76% week on week to 12.34Mt in the week ending November 2, according to statistics by Mysteel, a domestic steel information provider

Aggregate stocks hit a record low since 2010 down 1.53Mt y-o-y, which can be largely attributed to the substantial efforts of local producers to limit output.

Earlier data from China Iron and Steel Association (CISA) showed that daily output of crude steel in the country remained around 1.999Mt during October 11-20, up 4.3% from earlier in the month. The CISA estimated crude steel output to be around 21.183Mt for October.

Sales reached 1.27Mt a day in mid-October, 12.1% higher from that in the previous 10 days. There is a strong indication that steel production is becoming more concentrated in large and medium-sized steel mills, and that the demand for products for construction are shrinking and are mainly produced by smaller mills.
Some blast furnaces in Hebei province and a number of north-eastern provinces and regions have restarted following maintenance.

For the most part of October, there are signs of a pick-up in steel prices as a number of players seemed to be convinced that the worst part of the on-going economic crisis has passed.
Source: China Metals e-mail