China reduced steel production by 3.8% m/m in November

Chinese steel companies reduced steel production by 3.8% in November 2023 compared to the previous month – to 76.1 million tons. This is evidenced by data from the National Bureau of Statistics of China (NBS), Nasdaq reports.

Compared to November 2022, China increased steel production by 0.4% in November 2023.

Chinese steel production has fallen for the fifth consecutive month as low margins and slowing demand have dampened enthusiasm for production at many steel mills.

Average daily steel production in November was 2.54 million tons, the lowest since December 2022. This is down 0.4% compared to October.

The average utilization rate of blast furnace capacity, which accounts for about 90% of the country’s total steel production, decreased by 3.1% month-on-month – to 88.61%. However, the profitability of electric arc furnace plants improved last month, causing a jump in utilization from 67% at the end of October to 86.5% at the end of November.

“Steel production has also been affected by more frequent and widespread restrictions on factory production in northern China in response to heavy pollution. Total steel production could fall further in December as cold weather disrupts activity in the construction sector and plants often shut down for maintenance during the month, analysts said.

In January-November 2023, China increased steel production by 1.5% y/y – up to 952.14 million tons. At the same time, the annual output of steel in the PRC fell during 2021-2022 due to restrictions on production introduced by the authorities. No such restrictions were announced in 2023.

As GMK Center reported earlir, in 2022, China reduced production of steel by 2.2% compared to 2021 – to 1.01 billion tons. Steel production in the country fell due to the slowdown of the economy and the downturn in the real estate market.