China’s daily crude steel output has declined for a sixth straight month in October, falling 4.9% on the month and hitting a 44-month low, the China Iron & Steel Association said Nov. 9.
Industry sources expected China’s steel output to fall further in November as some steel mills were already operating at a loss.
However, China’s steel prices have continued their downward trend in November, indicating steel demand had dropped faster than the pace of decline in production, the sources added.
CISA estimated China’s daily crude steel in October fell 21.4% on the year, to 2.338 million mt/day, which would be the lowest since March 2018.
Despite fast falling steel output, combined finished steel inventories at steel mills and spot markets monitored by CISA dropped by just 0.3% from end-September, to 22.53 million mt.
Some market sources said steel inventories fell at a much slower rate than steel production, because decline in end-user demand, especially in the construction sector, outstripped decline in steel supply.
According to property data provider China Index Academy, the value of financing by China’s property developers in October dropped 60% on the month and 75% on the year. China’s move to tighten financing in the sector is expected to continue undermine construction steel demand in 2022, some sources added.