According to data from China’s National Bureau of Statistics (NBS), the country’s crude steel output in June fell 1.3% from May, curbed by dwindling demand and shrinking steel margins.
The world’s largest steel producer made 91.61 million metric tons of crude steel last month, down from 92.86 million tons in May. However, it was still up 0.2% from a year earlier.
Steel demand eased last month as summer heatwaves and heavy rains in southern regions curbed construction activities. “Supply pressures mounted amid seasonally slack demand, deteriorating market confidence, sending downward pressure to steel prices,” said Kevin Bai, a Beijing-based analyst at consultancy CRU Group.
Additionally, steel exports slid by more than 9% from May to 8.75 million tons in June, further weighing on domestic output. In response to falling steel prices and higher inventories, several steelmakers scaled down output and some carried out equipment maintenance.
The June number represents an average daily output of about 3.05 million tons, the highest since April 2023, but still lower than the 3 million tons in May and 3.04 million tons in June 2023. The higher daily output in June was partly due to the month having one less day, said Ge Xin, a Beijing-based analyst at consultancy Lange Steel.
For the first half of 2024, China produced 530.57 million tons of crude steel, down 1.1% from the same period in 2023. Analysts expect improved demand and better margins to drive up production in July.