BEIJING: China’s crude steel output in November fell 3.8% from the prior month, extending a decline for the fifth consecutive month, official data showed on Friday, as low margins and slowing demand dented enthusiasm for production at many steelmakers.
The world’s largest steel producer manufactured 76.1 million metric tons of the ferrous metal last month, down from 79.09 million tons in October, data from the National Bureau of Statistics (NBS) showed.
The November volume compares to 74.54 million tons from the same month in 2022.
Average daily crude steel output last month was around 2.54 million tons, the lowest since December 2022, versus 2.55 million tons in October, according to Reuters calculations based on the data.
The average utilisation rate at blast-furnace based mills, which account for about 90% of the country’s total steel output, declined by 3.1% month-on-month to 88.61%, data from consultancy Mysteel showed, as profit margins narrowed further.
Steel output was also hit by more frequent and widespread production restrictions imposed on mills in north China in response to heavy pollution, analysts say.
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However, profits at electric-arc-furnace (EAF)-based steelmaking improved last month, driving a jump in utilisation rates at the less polluting mills from 67% at the end of October to 86.5% in late November, data from consultancy Fubao showed.
Profit among mills in east China’s Jiangsu province, many of which are EAF-based, averaged 222 yuan a ton last month, compared to 10 yuan a ton in October, according to the Fubao data.
Overall steel output in December may fall further, analysts say, as cold weather disrupts activity in the construction sector and mills often shut for maintenance during the month.
Output over the first 11 months of this year was up 1.5% on the same period a year ago at 952.14 million tons.
Annual steel output in the world’s second-largest economy dropped in both 2021 and 2022 after Beijing introduced a production cap to limit carbon emissions. It has not announced a cap for this year.