China’s September crude steel output hits 4-year low

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China's crude steel output in September fell to the lowest level since December 2017 with mills cutting production on tight power supply and Beijing's requirements to flatten steel output and exports for 2020.

Crude steel output at 73.75mn t in September fell by 11.4pc from August and by 21.2pc on the year, the National Bureau of Statistics (NBS) said. The average output fell by 8.5pc to 2.46mn t/d from 2.69mn t/d in August and by 13.8pc from 2.8mn t/d in July.

Year-to-date crude steel output rose by 2pc to 806mn t.

Finished steel output in September fell by 14.8pc to 102mn t from a year earlier. Pig iron output fell by 16.1pc to 65.19mn t over the same period.

More steel mills started to cut output in September as tight thermal coal supply led to power shortages. Nationwide capacity utilisation of electrical arc furnaces (EAFs) fell to 60pc in September from 80pc in September 2020, and blast furnace (BF) utilisation fell by 15pc to 73pc in September on the year, market participants said.

China's steel exports fell to a 2021 low in September after mills were ordered to keep exports flat to 2020 levels.

Reduced steel supply drove steel prices up. Argus Shanghai rebar prices increased by 620 yuan/t ($96/t) ex-warehouse, or by 11.9pc, from 31 August to 30 September.

China produced 1.065bn t of crude steel in 2020. China needs to limit crude output to 259mn t for the remaining three months of this year to achieve its full-year target of zero growth for 2021. China produced 271mn t crude steel in October-December 2020. Its policymakers will push for crude output cuts of 12mn t, or 4.4pc, for the rest of the year.

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