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22-10-2014, 07:16 AM
China's Sept steel output close to peak level
REELING FROM SUPPLY GLUT: Mills are still close to full capacity despite weak demand, and global iron ore miners are pushing ahead with expansion plans. PHOTO: REUTERS
22 Oct5:50 AM
Beijing
CHINA'S daily crude steel production rose 1.3 per cent in September to the highest level in three months, according to data from its statistics agency.
This suggests that mills are still close to full capacity despite weak demand and a steep slump in prices. Persistently high output from the world's top producer could worsen prices of Shanghai rebar futures, which sank 13 per cent last month, and also dent spot iron ore prices that are reeling from a supply glut as global miners of the steelmaking ingredient push ahead with expansion plans.
China produced 67.54 million tonnes of crude steel in September, down 2 per cent from the previous month and level with the corresponding 2013 month, the National Bureau of Statistics reported on Tuesday.
But the daily output rate rose to 2.25 million tonnes from 2.22 million tonnes in August, driven by a slight improvement in industrial activity. This was the highest since June when output touched a record of 2.31 million tonnes per day.
"The 1.3 per cent increase matches the recovery in electricity consumption versus August as well as the slightly better monthly PMI results," said Standard Bank analyst Melinda Moore, referring to data showing that growth in China's manufacturing sector held up in September.
A slowdown in China's economic growth - most recently to the lowest level since the 2008/09 global financial crisis - has shrunk steel demand in China, aggravating overcapacity problems in the sector.
While there are no signs that conditions will improve in the final quarter of the year, steel firms have continued to pursue a strategy based on outlasting rivals. "Mills prefer market share maintenance, hoping the strong will survive and the weak will fall away," Ms Moore said.
Persistent overproduction in the world's biggest steel market has driven prices to record lows this year and, despite a surge in imports, iron ore prices have also slumped around 40 per cent since the beginning of 2014.
Crude steel output over the first three quarters of the year reached 618 million tonnes, up 2.3 per cent on year, the National Bureau of Statistics said.
Mounting losses and financing problems have already forced a number of steel producers to halt their operations, but the impact on overall output has been negligible, with other mills stepping in to fill the gap. Reuters
REELING FROM SUPPLY GLUT: Mills are still close to full capacity despite weak demand, and global iron ore miners are pushing ahead with expansion plans. PHOTO: REUTERS
22 Oct5:50 AM
Beijing
CHINA'S daily crude steel production rose 1.3 per cent in September to the highest level in three months, according to data from its statistics agency.
This suggests that mills are still close to full capacity despite weak demand and a steep slump in prices. Persistently high output from the world's top producer could worsen prices of Shanghai rebar futures, which sank 13 per cent last month, and also dent spot iron ore prices that are reeling from a supply glut as global miners of the steelmaking ingredient push ahead with expansion plans.
China produced 67.54 million tonnes of crude steel in September, down 2 per cent from the previous month and level with the corresponding 2013 month, the National Bureau of Statistics reported on Tuesday.
But the daily output rate rose to 2.25 million tonnes from 2.22 million tonnes in August, driven by a slight improvement in industrial activity. This was the highest since June when output touched a record of 2.31 million tonnes per day.
"The 1.3 per cent increase matches the recovery in electricity consumption versus August as well as the slightly better monthly PMI results," said Standard Bank analyst Melinda Moore, referring to data showing that growth in China's manufacturing sector held up in September.
A slowdown in China's economic growth - most recently to the lowest level since the 2008/09 global financial crisis - has shrunk steel demand in China, aggravating overcapacity problems in the sector.
While there are no signs that conditions will improve in the final quarter of the year, steel firms have continued to pursue a strategy based on outlasting rivals. "Mills prefer market share maintenance, hoping the strong will survive and the weak will fall away," Ms Moore said.
Persistent overproduction in the world's biggest steel market has driven prices to record lows this year and, despite a surge in imports, iron ore prices have also slumped around 40 per cent since the beginning of 2014.
Crude steel output over the first three quarters of the year reached 618 million tonnes, up 2.3 per cent on year, the National Bureau of Statistics said.
Mounting losses and financing problems have already forced a number of steel producers to halt their operations, but the impact on overall output has been negligible, with other mills stepping in to fill the gap. Reuters