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Member mills of the China Iron & Steel Assn (Cisa) produced crude steel at an average rate of 1.717 million tpd during the first ten days of this month, up 3.6% from the preceding eleven days, according to estimates by the industry body released late on Wednesday August 19.
Cisa member mills, which are mainly medium-sized and large steelmakers, account for roughly 80% of the country’s total steel output.
The higher output was mainly due to an increase in steel prices in late July and early August, market sources suggested.
Eastern Chinese rebar prices, for instance, started increasing from July 24 and gained a total of 290 yuan ($45) per tonne to peak at 2,150-2,210 yuan ($336-345) per tonne on August 6, according to Steel First’s price archives.
Prices began to retreat after that, however, since the seasonally weak demand could not sustain the rapid increases.
The rebound in production could add more pressure to spot prices over the next few days, market participants told Steel First.
As at August 10, Cisa member mills had a total of 15.51 million tonnes of finished steel in their inventories, up 2.6% from July 31 levels, the association’s data shows.
China’s crude steel output rebounded in early August after falling steadily since late June, as a recovery in steel prices in the latter part of last month led producers to up production.