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The country produced 1.9606 million tpd of crude steel during the last eleven days of December, down 2.67% from the preceding ten days, according to data released by the China Iron & Steel Assn (Cisa) on Thursday January 9.
Output of Cisa member mills, which are mainly medium-sized to large steelmakers, averaged 1.6384 million tpd in late-December, down 3.18% from mid-December.
“Subdued steel demand and high raw materials cost have squeezed mills’ profit margins, which led some to cut production,” a northern Chinese mill source told Steel First.
Eastern Chinese rebar prices were at 3,460-3,500 yuan ($567-573) per tonne including VAT on December 31, down 90-120 yuan ($15-20) per tonne from prices on December 20, according to Steel First’s price archive.
Tighter pollution controls since November could also be part of the reason for the production decline, a Shanghai-based analyst said.
The average of Cisa’s three production figures for December comes to about 1.991 million tpd, down 6% from the average of the previous month.
Cisa member mills’ combined inventory of finished steel totalled 12.8745 million tonnes as at December 31, down 948,000 tonnes or 6.86% from December 20 levels, according to Cisa figures. But stockpiles were up by a significant 23.1% compared with those at the beginning of the year.
China’s daily crude steel output dropped in late December, as mills cut production following the weakening of the steel market since the latter half of the month.