China crude steel output falls for 2nd month in July on negative margins
July output down 9.5% m/m, down 9% y/y
January-July output down 2.2% y/y
August output to be slightly lower than July-analysts
Adds bullets, milestones, August output outlook
By Amy Lv and Colleen Howe
BEIJING, Aug 15 (Reuters) -China's crude steel output fell in July for a second month, declining by 9.5% from June, official data showed on Thursday, as many steelmakers carried out maintenance work amid a widening of already negative margins.
The world's largest steel producer made 82.94 million metric tons of crude steel last month, data from the National Bureau of Statistics (NBS) showed, down from 91.61 million tons in June.
July output, the lowest for a single month since December 2023, was down 9% from a year earlier, the data showed, surprising analysts who forecast a modest annual fall.
China's steel producers cut output in late July and early August because margins were negative, said Atilla Widnell, managing director at Navigate Commodities, before the data was released.
"Chinese steel mills have responded to severely negative margins and the mass liquidation of old-specification nationwide rebar inventories, driven by upcoming new national quality standards by significantly reducing output over the past four weeks," Widnell said.
On June 25, China announced mandatory rebar standards to replace voluntary guidelines that were set to go into effect from Sept. 25, prompting some panic selling of old inventories that pressured steel prices and further squeezed steel margins.
That, coupled with signs of weakening steel exports, was another blow to steelmakers already hit hard by dwindling demand amid a persistent property market downturn.
Steel prices SRBcv1 fell 6.5% in July. Only about 15% of steelmakers surveyed by consultancy Mysteel were operating at a profit by late July, compared to around 43% in late June.
Also, more steel mills cut production after hopes of further government stimulus from two important meetings in July evaporated.
In July, daily output averaged about 2.68 million tons, compared with 3.05 million tons in June and 2.93 million tons in July 2023, according to Reuters calculations based on the NBS data.
Output over the first seven months of 2024 fell 2.2% from a year earlier, widening from a drop of 1.1% over January to June, to 613.72 million tons, according to the NBS.
Output in August is expected to fall from July levels as an increasing number of steelmakers are undertaking equipment maintenance after persistently falling steel prices have enlarged their losses, according to analysts.
But they said the pace of the decline was likely to slow due to the low base in July.
Only around 5% of steelmakers were making a profit as of Aug. 9, Mysteel data showed.
Reporting by Amy Lv and Colleen Howe; Editing by Kim Coghill, Christian Schmollinger and Jamie Freed
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.