Steel production in China continues to fall

Official data released Wednesday showed China's steel production contracted for the third straight month in August as Beijing cut production to cut carbon emissions.

According to the National Bureau of Statistics (NBS), the world's largest steelmaker produced 83.24 million tonnes of metal last month, down 4.1% from July and dropped significantly from 94.85 million tonnes. in August 2020.

It was the lowest monthly rate since March 2020, excluding the January and February data that NBS compiles.

Average daily crude steel production in August was 2.69 million tons, up from 2.8 million tons in July, according to NBS data.

China produced 733.02 million tonnes of crude steel in the first eight months of the year, up 5.3% from January to August 2020, according to the Bureau of Statistics.

China's decision to cut carbon and pollutant emissions from the iron and steel industry has limited steel production since late June, but those efforts have also supported steel prices due to supply problems, as September and October are usually peak periods for steel consumption in construction.

Blast furnace utilization rates at 163 plants across the country fell below 76% in August, according to consultancy Mysteel, falling sharply from an average of 86.7% in the same period a year earlier.

The country's largest steelmaker Baoshan Iron & Steel Co Ltd has cut steel exports in response to a government call for steelmakers and traders to secure domestic supplies this year.

Futures prices for steel rebar for construction and hot rolled coil used in the manufacturing sector rose 22% and 30% this year through the end of August, respectively.