According to data from the China Iron and Steel Association, daily crude steel output from China’s large steel mills rebounded 3.6% in the first 10 days of August to 1.812 million tonnes adding to concerns about oversupply.
Production by CISA’s 88 steel mill members had dipped 2.8 percent over the July 21-31 period compared with the previous 10 days, raising hopes that big producers were taking heed of market signals by slashing output.
Total steel output in early August was estimated at 2.325 million tonnes, up 2.5% indicating that much of the rebound appears to have been driven by planned production increases by the bigger mills.
The CISA affiliated Custeel consultancy estimated that non CISA steel mills produced an average of 505,000 tonnes a day over the first 10 days of August, down from 512,000 tonnes over July 21st to 31st 2014.
Custeel estimated that the minnows accounted for 21.7% of total production down from 22.6% over the previous 11 day period. As a result of weak demand, traders have been reluctant to buy and some smaller mills have reduced output in order to control their inventories.
The consultancy said that the Shagang Group, China’s largest privately owned mill, raised production by an average of 11,400 tonnes a day in early August, while the Baotou Steel Group raised production by a similar amount.
However, the Baoshan Iron and Steel Group cut output by 10,400 tonnes a day over the period. Product stocks at major steel mills rose 3.4% compared to the last 11 days of July to reach 14.57 million tonnes by August 10.
Source – Reuters
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