Weaker Chinese July steel output signals demand slide

2018-08-20 22:24:16

China’s major steelmakers saw output fall again in late July suggesting restrictions were having some effect, although output was still higher than a year earlier. Kallanish expects data released Tuesday to show output and demand fell month-on-month, but continues to grow from 2017.

In the last eleven days of July, China’s major steelmakers produced on average 1.91 million tonnes/day of crude steel, according to the China Iron and Steel Association (CISA). That was down -2.5% from mid-July, but still 3% higher year-on-year. Finished steel inventory held at mills also dropped -7.45% over the period to 11.44mt, CISA said.

National crude steel data will be released this week and is expected to show a fall from June. Working on this assumption, Kallanish expects the data to show end user buying was down another -5.6% in July. That would still leave demand considerably higher than last summer however, and over January-July, end user demand is still expected to be up some 6.4%.