According to Bloomberg - citing data released by the National Bureau of Statistics – official November Chinese average daily crude steel production came in at 1.58 million tonnes per day (mtpd), a 5.4% decline compared to October’s 1.67 mtpd. Total November crude steel production came in at 47.3 mt, an 8.7% decrease from October’s 51.8 mt.
While Chinese mills had repeatedly ignored attempts by the Chinese government to reign in production, we believe higher raw material costs and rising inventories finally forced steelmakers to cut output. Chinese production is still high – only 6.5% below September’s record – and we hope to see further production cuts moving forward to bring the production/consumption ratio more in balance.
However, we remain concerned that Chinese mills will continue to favor increasing exports over cutting production; November steel exports rose 6% to 2.87 mt and are a whopping 115% higher than the lows in May.
Disclosure: No Positions