In March, China’s crude steel output experienced a 7.8% decline from the previous year, reflecting steelmakers’ response to weaker-than-expected demand and growing inventories. Despite the decline being somewhat less than forecasted, the world’s largest steel producer manufactured 88.27 million metric tons of crude steel last month, with an average daily output of about 2.85 million tons.
The industry faced challenges following China’s week-long Lunar New Year holiday, as demand recovery faltered and steelmakers contended with high existing stocks produced at elevated cost levels. Provincial steel associations issued statements in March, urging voluntary reductions in production to counter persistent price declines, which have impacted steel margins and market confidence.
The capacity utilization rate among blast-furnace based steelmakers declined to 82.76% by the end of March, reflecting the impact of production adjustments. China’s first-quarter crude steel production totaled 256.55 million tons, marking a 1.9% decrease compared to the previous year.
Analysts anticipate an uptick in output for April, driven by signs of improved downstream steel demand and the restart of production at some mills following equipment maintenance. Additionally, the government’s commitment to managing crude steel output in the industry has instilled optimism for potential improvements in industry fundamentals.