China crude steel output hits record daily high in September

Output rose 0.9% from the previous month as mills ramped up production to meet demand

China's daily crude steel output hit a record high in September, official data showed on Monday, rising 0.9 per cent from the previous month as mills ramped up production to meet demand from infrastructure projects.

For the month, production dipped 2.4 per cent from August - which has an extra day - to 92.56 million tonnes, data from the National Bureau of Statistics (NBS) showed. That was up 11.8 per cent from September last year.

Average daily output for the month was 3.09 million tonnes, according to Reuters calculations based on the NBS data, up 0.9 per cent from August and the highest figure on Reuters records since 2014.

China's crude steel production has been running at high levels since May, bucking the trend of sluggish global demand as consumption was lifted by the country's infrastructure boom and underpinned by the manufacturing sector.

The output rise on a daily adjusted basis in September was unsurprising given the increase in steel inventories, particularly of rebar, during this period, according to Atilla Widnell, managing director of Navigate Commodities

"That said, improving domestic apparent steel consumption and falling production through the first half of October has resulted in a material decline in steel inventories – from its recent peak in September," Widnell said.

Also read: China's economy accelerates 4.9% in Q3, broadening recovery from Covid-19 pandemic

The weekly utilisation rate at blast furnaces in 247 mills across China was 93.96 per cent on average last month, down from 94.84 per cent in August, Reuters calculated based on data from Mysteel consultancy.

Total inventories at mills and held by traders were well above 21 million tonnes in September - a typical peak consumption season for construction materials - compared with around 16 million tonnes a year earlier, according to Mysteel.

Prices for spot iron ore with 62 per cent content <SH-CCN-IRNOR62> jumped 18.7 per cent in the third quarter.

For the first three quarters, China churned out 781.59 million tonnes of steel, up 4.5 per cent from the same period in 2019, the statistics bureau data showed.