Member mills of the China Iron & Steel Association (Cisa) produced crude steel at an average rate of 1.7895 million tonnes per day during the last 11 days of October, down 28,800 tonnes per day - or 1.6% - from an average rate of 1.8183 million tonnes per day during the second 10 days of last month, according to data released by the industry body late on Monday November 13.
Cisa member mills, which are mainly medium-sized and large steelmakers, account for roughly 80% of the country’s total steel output.
They had 12.18 million tonnes of finished steel in their inventories on October 31, down 4.8% compared with 12.8 million tonnes 11 days earlier, according to Cisa’s statistics.
Market participants expect major mills’ production rates to continue to fall in the remaining two months of this year as many of them would have to adhere to output restrictions implemented by both local and central governments for the winter heating season, which starts on Wednesday and would last until mid-March.
A drop in supply with support steel prices, market sources said.
For instance, rebar prices in east China average 3,909 yuan ($589) per tonne over the October 23-31 period, largely flat compared with an average of 3,924 yuan per tonne in mid-October, according to Metal Bulletin’s price archive.
China’s major mills lowered their crude steel output rates further in late October even as finished steel inventories continued to decrease.