Crude steel production among China's top 10 steelmaking provinces and autonomous regions declined by 2.7% on year to 416.84 million tonnes over January-July, according to the latest data from the National Bureau of Statistics (NBS) released on August 19.

The rate of decline was slightly faster than the 2.6% fall recorded in the H1 period, mainly due to a sharp decline in crude steel output during July. Last month, crude steel output among the top 10 steel hubs fell 3.8% on year to reach 54.22 million tonnes, as against the 1.2% increase seen in June's result.

The trend was also consistent with China's total crude steel output in July, which slipped by 3.6% on year to reach 76.93 million tonnes, as Mysteel Global reported.

Although the NBS does not provide commentary alongside its data, a renewed downward trend in crude steel output in the top 10 regions in July reflected the pressure Chinese mills faced from widening margin losses on steel sales, prompting more to scale back production.

By end-July, only 83 or 33% of the 247 mills Mysteel regularly monitors could enjoy positive margins, down by about 9% from the beginning of the month. Daily hot metal output among the 247 mills Mysteel regularly monitors during July 23-29 averaged 2.36 million tonnes, down by 3.2% on month.

Notably, Hebei province, China's largest steelmaking hub, saw its crude steel output decline by 6.1% on year in July. This was also mirrored in the province's Purchasing Managers' Index (PMI) for the steel industry last month, which fell 4.5 points on month to hit intra-year low of 42, as Mysteel Global reported.

Meanwhile, crude steel output in East China's Jiangsu and Shandong – the country's second and third largest steelmaking hubs – also posted 5.3% and 1.5% declines in July.

In contrast, South China's Guangdong province saw its crude steel output jump by 10.7% in July. For January-July, Guangdong was the only province among the top 10 hubs to record growth in crude steel output.

Source:Mysteel Global