News Room - Steel Industry

Posted on 12 Jan 2010

China daily steel output at 1.645 mln T by end Dec

China's daily crude steel output remained resilient in the last ten days of December, reaching 1.645 million tonnes, just 1.5 percent short of an August all-time high, according to industry consultancy Mysteel.

 

Basic Materials

 

With daily production levels more or less unchanged over the month, total output for December is likely to exceed 50 million tonnes, around 5 percent higher than November, according to Reuters calculations.

 

The figure would put China's total output for the year at around 569 million tonnes, up 13.8 percent year on year, despite the global economic downturn and a 58.5 percent slump in China's steel export volumes over 2009.

 

China produced a record high of 1.67 million tonnes per day in August, leading to a panic about overcapacity and an alarming decline in prices lasting until the middle of October.

 

However, despite the economic downturn, domestic demand -- backed by a massive 4 trillion yuan ($586 billion) stimulus package, a surge in real estate demand and a record rise in automobile sales -- has proven far more robust than many in the industry predicted, and prices throughout the country have been recovering since.

 

Output in December traditionally eases off as construction activities slow, but traders and mills -- seeking to take advantage of a widely anticipated rise in prices in the coming year -- have found it difficult to increase their stockpiles.

 

Inventories of long products used mainly by the real estate sector rose 6.86 percent in December to end the month at 5.63 million tonnes, but flat product stocks -- used in cars and consumer goods -- fell 1.3 percent over the same period to end at 5.32 million tonnes, according to a research note from China's Guosen Securities.

 

Customs figures on Sunday revealed that China imported 62.16 million tonnes of iron ore in December, up 21 percent compared with the previous month and close to its October record.

 

However, the rise appears to have had little impact on iron ore stockpiles at China's major ports, which remained at around 65-66 million tonnes over the course of December.

 

Spot market iron ore prices on the domestic market have been soaring, with Indian 63.5 percent fines ending last week at $130-133, up 17 percent since the beginning of December.