China’s crude steel output down in mid-August

China’s crude steel output dipped in mid-August, reversing the growth trend seen in the first ten days of the month.

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The country produced 2.12 million tpd of crude steel during the second ten days of August, down 1.2% from the previous period, according to estimates released by China Iron & Steel Association (Cisa) on Wednesday August 28.

Output of Cisa member mills, which are mainly medium to large-sized steel mills, averaged 1.74 million tpd over the same period, down 1.5% from the level in the first ten days of the month.

The decline in output was a little beyond market expectations, as finished steel prices have remained strong since the beginning of August, and mills have generally operated at high utilization rates.

Domestic rebar prices in Beijing were at 3,580-3,670 yuan ($581-595) per tonne on August 20, up 100-110 yuan ($16-18) per tonne since the start of the month, according to Steel First price archives.

“Some smaller mills were forced to cut production due to stricter environmental inspections earlier this month, which could be partly the reason for the drop in output,” a Shanghai-based analyst said. Although she added the impact should be insignificant.

Meanwhile, combined steel inventory at Cisa member mills totaled 12.83 million tonnes as of August 20, up 5.5% from August 10.

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