China reduced steel production by 1.9% y/y in Q1

In the first quarter of 2024, Chinese steelmakers reduced steel production by 1.9% compared to the same period in 2023 – to 256.55 million tons. Reuters reports with reference to the National Bureau of Statistics.

In March, steel production in the country fell by 7.8% y/y – to 88.27 million tons. Chinese steelmakers cut production amid lower-than-expected demand and rising inventories. At the same time, analysts had expected a drop of more than 10%.

The average daily steel production last month amounted to about 2.85 million tons, compared to 2.8 million tons in January-February and 3.09 million tons in March 2023.

According to analysts, steel production is expected to grow in April as there are signs of improving demand for steel products. For this reason, some plants have resumed production after equipment maintenance. The government’s announcement that it will continue to regulate steel production in 2024 has also raised hopes for an improvement in the industry.

In January-March 2024, Chinese steel companies increased exports of steel products by 30.7% compared to the same period in 2023, to 25.8 million tons. Exports reached their highest level since 2016. Imports in the first quarter amounted to 1.75 million tons, down 8.6% year-on-year.

As GMK Center reported earlier, CISA called on steel mills to reduce production intensity in order to meet the needs of customers and balance supply and demand. According to the industry association, the ongoing contraction in the real estate sector and the slowdown in infrastructure construction have led to sluggish demand for steel.