22 Oct 2010 10:10

China's daily crude steel output continues to slide

Shanghai. October 22. INTERFAX-CHINA - China's daily crude steel output stood at an average of around 1.6 million tons in September, a decrease of 4.19 percent month-on-month and the lowest level recorded so far in 2010, according to an Oct. 21 National Bureau of Statistics (NBS) report.

China's total crude steel output for September amounted to 47.95 million tons, a decrease of 5.9 percent year-on-year. Steel product output, meanwhile, increased 4.5 percent year-on-year to 65.43 million tons, and pig iron production dropped 6 percent to 45.7 million tons.

The production declines are a direct result of the central government's ongoing policies to reduce energy consumption, Custeel analyst Hu Yanping told Interfax.

According to Hu, domestic crude steel output began to show signs of climbing back up at the beginning of October, with the average daily output in the first ten days of the month increasing 0.56 percent from the same period of last month to approximately 1.63 million tons.

"Some steel mills in Hebei Province, China's largest steel producing region, have started ramping up production once again," Hu explained. Steel mills in Wuan City, for example, while still required to limit energy consumption, are no longer placing restrictions on production levels, Hu said.

"At the same time, however, steel mills in the both Shandong and Henan Province are focusing on reducing production," Hu noted. Steel mills in the Shandong city of Jinan suspended production for seven days beginning on Oct. 15 as part of their requirement to halt production for a total of 20 days in the fourth quarter of the year. Two 400 cubic meter blast furnaces in Henan's Anyang City have also currently suspended production, Hu added.

Hu noted that the fourth quarter of the year will see a number of steel mills carrying out maintenance work, and so expects daily crude steel output to remain low during this time, averaging around 1.7 million tons. "I expect total crude steel output for 2010 will increase, however, rising 10.3 percent year-on-year to 626 million tons" Hu said, pointing out that the majority of China's steel mills were running at high capacity in the first half of the year.