China’s crude steel output up in early November on state-owned mills’ production push

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State-owned and large steelmakers who are also members of the China Iron & Steel Assn (Cisa) contributed most to the increase this month, with their daily crude steel output at 1.638 million tonnes in the first 10 days of November, according to the association.

This number is 7.78% higher compared with that of the last 10 days of October.

It is also the highest level since late July, Cisa said.

National crude steel output, which includes the output of both Cisa members and non-member steelmakers, also rose 1.61% to 1.956 million tonnes per day in early November, Cisa estimated.

“The large rise in production has already put pressure on the market and may even lead to another round of price decrease if steel mills do not trim production as soon as possible,” a major trader in Shanghai said.

China’s hot rolled coil prices, which saw a strong rise in the first two weeks of November, have started to drop since late last week.

In Shanghai, commercial-quality HRC (4.5-12mm) changed hands at 3,900-3,960 yuan ($620-630) per tonne on Tuesday, down 20-30 yuan per tonne from Monday. The prices compare with the peak of 3,990-4,020 yuan per tonne last Thursday.

Despite lower investment in the steel sector this year, China’s steel capacity is still on the rise.

Wang Xiaoqi, Cisa’s vice-chairman, said late last week that China’s total steel capacity would top 1 billion tonnes in 2012.