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Member mills of the China Iron & Steel Assn (Cisa) produced an average of 1.785 million tpd of crude steel during the first ten days of this month, up 3.6% from the last eleven days of December, according to data released by the industry body late on last Friday January 16.
Cisa members, which are mainly medium-sized and large steelmakers, account for roughly 80% of the country’s total steel output.
“It’s unreasonable for output to rebound when the market is in a downward trend,” a northern Chinese mill source said.
Eastern Chinese HRC prices lost 50 yuan ($8) per tonne during the January 1-9 period, according to Steel First price archives.
“I think this is unsustainable. Mills are unlikely to keep their production high much longer amid the depressed market,” he added.
A Shanghai-based analyst at Metal Bulletin Research, a sister company of Steel First’s, pointed out that a major northern Chinese mill had not reported its output in late December to Cisa. This means output in late December ought to have been similar to that reported for early January, she said.
Cisa member mills’ combined finished steel inventory stood at 13.637 million tonnes as at January 10, up 3% from December 31 levels, according to the industry body’s data.
China’s crude steel output rebounded in early January after a short-lived drop at the end of last month.