Members' daily crude steel output marks time in late-Feb

Daily crude steel output among the member mills of the China Iron and Steel Association (CISA) stayed largely steady during February 21-28 to average 2.03 million tonnes/day, dropping by a minimal 0.1% from the previous ten-day period, according to the latest release from the association on March 5.

But the average was lower by a significant 10.2% on-year compared to the corresponding survey period last year, according to the release. The period overlapped with this year's Chinese New Year (CNY) holiday between February 15 and 23.

Although CISA made no comment regarding the retreat in crude steel output, Mysteel Global notes that while most of China's large integrated mills generally produced as normal during the break, electric-arc furnace mills – also included in CISA's membership – mostly stopped production during the nine-day break, as reported. Also, last year China's CNY break fell much earlier, spanning eight days between January 28 and February 4.

Meanwhile, based on the performance of its member mills during February 21-28, CISA estimated that the country's daily crude steel output averaged 2.5 million t/d over the last eight days in February, also edging down negligibly by 0.1% from February 11-20, the release revealed.

On the other hand, daily finished steel output among the member mills averaged 2.11 million t/d over February 21-28, mounting by a marked 11% or 210,000 t/d from mid-February, the same release showed.

The association attributed the overall increase to several member mills conducting centralized end-of-month warehousing and settlement of finished steel. Excluding this factor, daily finished steel output still rose by 5.9% from the middle ten days of February.

Despite the higher output, finished steel stocks held by the CISA member mills totaled 17.34 million tonnes as of February 28, declining by 4.3% or 780,000 tonnes from February 20, another release issued on the same day indicated.

The association offered no explanation to the inventory decline, but as Mysteel Global has reported, most steel traders and distributors had resumed operations by February 24 following the official end of the CNY break the day before. This spurred a surge in deliveries from mills keen to offload their post-holiday inventories to traders, ultimately resulting in the transfer of finished steel stocks from mills to commercial warehouses.

As such, finished steel stocks held by traders in commercial warehouses in the 21 cities CISA regularly checks totalled 10.88 million tonnes as of February 28, jumping by 14.2% or 1.35 million tonnes from eight days prior, data in another CISA release published Tuesday showed.

Source:Mysteel Global