Crude steel production among China's top ten steelmaking provinces and autonomous regions slid by 3.27% on year to total 534.15 million tonnes during this year's January-September period, according to the latest data released by the country's National Bureau of Statistics (NBS).
During September alone, crude steel output among the country's top ten regions was mixed again, with half of them posting on-year decreases, and another half logging on-year rises. Of these, four of the top five regions logged on-year falls, with North China's Hebei province, the country's largest steel production base, posting the sharpest on-year decline of 14.3% last month, further widening the 3.9% on-year decline recorded in August.
Total September production in the ten regions reached 50.87 million tonnes, down by 4% from the same period last year and being larger than the 2.3% on-year fall in August, the NBS data indicated.
The NBS provides no commentary to go with its data, but one of the likely reasons for the overall fall in last month's production was the mandated curbs imposed by local governments on steel mills and coking plants in north China in early September to improve air quality ahead of the commemorative activity in Beijing on September 3.
Indeed, crude steel output during September in Hebei – the province that leads the country's crude steel output and which hosts China's largest steel production base, Tangshan City – reached 12.56 million tonnes, lower by a huge 12.17% from August's 14.3 million tonnes and by a steeper 14.3% from January-September 2024. Tangshan is located only 150 kms east of Beijing and is often in the cross hairs of regulators for environmental pollution concerns.
On the other hand, the fall in output in September could be ascribed to the lower profit margins steel mills could earn and weaker-than-expected end-user demand.
Last month, Mysteel assessed the profit margin earned by blast furnace mills making rebar at an average of just Yuan 9.7/tonne ($1.36/t), a tremendous fall from August's Yuan 117.7/t. In parallel, the profits made by mills making hot rolled coils averaged Yuan 51.5/t, down from August's Yuan 139/t.
In addition, during September the combined daily trading volume of construction steel including rebar, wire rod and bar-in-coil among the 237 Chinese trading houses Mysteel monitors averaged 102,437 tonnes/day, higher by only 4.4% from that of August.
