China reduced steel production by 3% y/y in January-April

In January-April 2024, Chinese steel companies reduced steel production by 3% compared to the same period in 2023, to 343.67 million tons. This is reported by Reuters with reference to data from the National Bureau of Statistics of China (NBS).

In April, China reduced steel production by 2.6% compared to the previous month, and by 7.2% compared to April 2023 – to 85.94 million tons.

Most market participants had expected April steel production to increase month-on-month, citing improved demand and profitability of steelmakers. Average daily production for the month amounted to 2.86 million tons, compared to 2.85 million tons in March and 3.09 million tons in April 2023.

Analysts expect steel production in China to recover in May due to improved demand and consumption prospects.

«Given that total output in the first four months is already seeing an obvious decline, we expect this year’s annual output will be no higher than the 2023 level even without a nationwide government-mandated production restriction,» said Chu Xinli, a Shanghai-based analyst at China Futures.

China’s state planner, which announced in early April that it would continue to manage steel production in 2024, has not yet released details on the timing and extent of the production restrictions.

As a reminder, China produced 1.019 billion tons of steel in 2023, 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.

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 increased by 6.6% y/y – to 1.179 billion tons for the year.