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The country produced 2.066 million tpd of crude steel during the first ten days of the month, up 5.2% from the last eleven days of January, according to estimates released by the China Iron & Steel Assn (Cisa) on Tuesday February 18.
Output of Cisa member mills, which are mainly medium-sized to large steelmakers, averaged 1.761 million tpd in early February, up 6.2% from the preceding period.
As at February 10, Cisa member mills’ combined inventory of finished steel totalled 16.328 million tonnes, up by a significant 20% from January 31 levels, and 39.4% higher compared with at the beginning of the year, according to the association’s data.
The rapid increase in production and stockpile levels was beyond market expectations.
“I know that Chinese mills run as normal during the long break, but I cannot understand why production increased so much amid the persistently sluggish market,” a Shanghai-based analyst said.
One market observer in Beijing said he was surprised by the latest data. “It’s unbelievable that mills maintain high production levels even though stockpiles at mills and traders both surged,” he said.
As at last Friday, the combined market inventory of hot rolled coil, cold rolled coil, plate, rebar and wire rod in China’s 33 major cities totalled 19.8834 million tonnes, up 11.15% from a week earlier, according to market sources.
The unfavourable weather since the end of the holiday could have curbed steel deliveries and led to the increase in stockpiles, several participants said.
China’s daily crude steel output rebounded in early February despite the week-long Chinese New Year holiday during the period.