China reduced steel production by 1.1% y/y in the first half of the year

In January-June this year, China reduced steel production by 1.1% y/y – to 530.57 million tons. This is reported by Reuters with reference to the National Bureau of Statistics.

In June, steel production in the country fell by 1.3% compared to May, to 91.61 million tons, which was caused by lower demand and reduced margins for steelmakers. At the same time, this figure increased by 0.2% compared to the same period last year.

According to experts, demand for steel in the country fell in June as heat and heavy rains in the southern regions limited construction activity.

According to Kevin Bai, an analyst at CRU Group, the pressure on supply increased amid a seasonal decline in demand and deteriorating market confidence, which led to a decline in steel prices. In addition, exports of steel products weakened last month.

In response to the fall in steel prices and the increase in inventories, several producers cut production, and some carried out maintenance of equipment.

According to Reuters, in June, average daily steel production amounted to about 3.05 million tons, the highest since April 2023. In May, it amounted to 3 million tons.

Analysts expect steel production to grow in July amid improving demand and higher margins.

As GMK Center reported earlier, in January-June 2024, Chinese steel companies increased steel exports by 24% compared to the same period in 2023, to 53.4 million tons. In June, Chinese steelmakers exported 8.74 million tons of steel, down 9.2% m/m.