China’s September steel output slows on pollution cuts

Pollution cuts slowed China's September crude steel output but were not enough to erase gains from a year ago.

China produced 82.77mn t of crude steel in September, up by 2.2pc on the year but down by 5pc from August, according to national bureau of statistics data. January-September output was higher by 8.4pc at 747.82mn t.

Daily output in September slowed by 1.9pc to 2.759mn t/d from 2.815mn t/d in August.

Pig iron output in September rose by 2.1pc to 67.31mn t from a year ago, with January-September output up by 6.3pc at 612.03mn t. Daily output fell by 2.2pc to 2.244mn t/d.

Coke output in September rose by 3.2pc on the year, with January-September output up by 6.3pc at 354.36mn t.

North China localities restricted mill operations in late September to reduce air pollution for the 1-7 October national day holidays. These restrictions have continued on a rolling basis, curbing iron ore restocking demand in October.

Beijing finalised its winter air quality targets this week, which take effect next month. The targets are slightly looser than initially planned, indicating that China's steel output will not be cut significantly during the slower demand season. This has global ferrous markets worried that China may be forced to increase exports.

China's winter steel stocks peak in February-March, before they are drawn down by spring construction demand.

The official data has shown a higher rate of growth than data from China's largest steel mills this year.

China iron and steel association (Cisa) mill members averaged daily output of 2.029mn t/d in the four weeks to 10 September, up by 5pc on the year. This is up from growth rates of 3pc in June-July when Tangshan tightened restrictions but down from growth rates of 6-7pc in February-March. Cisa data include more than 100 of the country's largest steel mills.

source: Argus Media