China reduced steel production by 1.1% m/m in September

China’s steelmaking companies cut steel production by 1.1% in September 2024 compared to the previous month to 77.07 million tons, the lowest since December 2023. This is reported by XM.

Improved seasonal demand, coupled with the stimulus package from Beijing, helped slow the monthly decline in production, which was -3.3% m/m in August, -9.5% m/m in July, and -1.3% m/m in June.

Compared to September 2023, in September of this year, steel production by Chinese steelmakers decreased by 6.1%. At the same time, the average daily production for the month increased by 2.2% m/m, but fell by 6.2% y/y – to 2.57 million tons.

According to MySteel, almost 20% of China’s steel mills were operating at a profit at the end of September, compared to only 3.9% at the end of August.

“Thanks to macroeconomic stimulus and seasonal demand growth, steelmakers have gradually returned from losses to profits since the end of last month. As a result, the productivity of some steel companies has been on the rise,” commented Chu Xinli, an analyst at China Futures.

In January-September, steel production in China fell by 3.6% year-on-year – to 768.48 million tons.

As GMK Center reported earlier, in 2023, China produced 1.019 billion tons of steel, up 0.6% from 2022. Thus, the downward trend in the country’s steel industry has stopped after two consecutive years of declining production.

Last year, the Chinese authorities did not impose restrictions on steel production in line with their ambitions to reduce CO2 emissions, which contributed to an increase in production and revenue of local steelmakers. This year, the Chinese government plans to continue the practice of regulating steel production, but the extent and timing are not yet known.

China’s steel exports in 2023 increased by 36.2% y/y – to 90.3 million tons. Steel imports amounted to 7.64 million tons, down 27.6% y/y. Iron ore imports for the year increased by 6.6% y/y – to 1.179 billion tons.