China April crude steel output dips as mills seek to stem losses
16 May, 2023
China's crude steel output in April fell 3.2 per cent from a month earlier and was down 1.5 per cent from a year earlier, the statistics bureau said on Tuesday, as steel mills cut their production amid a slump in margins.
The world's largest steel producer manufactured 92.64 million tonnes of the metal last month, data from the National Bureau of Statistics (NBS) showed.
The April volume compares with 95.73 million tonnes produced in March and 92.78 million tonnes in the same month in 2022, according to NBS data.
"We are a little surprised at seeing a year-on-year decline, though the month-on-month fall is in line with our expectations," said Pei Hao, a Shanghai-based senior analyst at international brokerage firm FIS. The average daily steel output in April was approximately 3.09 million tonnes, little changed from that in March and April 2022, according to Reuters calculations based on the NBS data.
Only 26.41 per cent of 247 steel mills surveyed by consultancy Mysteel said they were operating profitably at the end of April, down from 54.55 per cent at the beginning of the month.
The government-backed China Iron and Steel Association (CISA) urged domestic steelmakers to cut production following rapid price drops to help ensure a stable cash flow.
This came after some steelmakers in northwest and northern China began maintenance work on blast furnaces after suffering losses, consultancy Mysteel and Shanghai Metals Market (SMM) said in reports.
"The capacity utilization rate among the electric-arc furnace-based steelmakers exhibited evident falls in April," said Pei.
"Meanwhile, the hot metal output also showed month-on-month declines due to production restrictions among some mills in the second half of the month," he added.
Hot metal is a blast furnace product and output is often used to gauge iron ore demand.
China churned out 354.39 million tonnes of crude steel over the first four months of this year, the highest for the period since 2021, up 4.1 per cent year-on-year, NBS data showed.
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Source: www.channelnewsasia.com