China’s crude steel output in October fell 2% from the prior month and slid 12.1% from the year before, curbed by weather-related restrictions on operations among mills in the northern region, thinning margins and falling exports.

The world’s largest producer of the product manufactured 72 million metric tons of crude steel last month, the lowest level since December 2023, data from the National Bureau of Statistics showed on Friday.

That was down from 73.49 million tons in September.

Average daily output in October was 2.32 million tons, down from 2.45 million tons in September, according to Reuters calculations based on the data.
Several cities in the northern regions of China, including the key steelmaking hub Tangshan, implemented production controls in late October in response to the forecast of worsening air quality.
Narrowing steel margins squeezed by higher raw materials prices also propelled some mills to scale back output last month, said analysts.

In October, iron ore TIO1! gained 2%, coking coal NYMEX:ACT1! jumped 13% while steel reinforcing rebar RBF1! only advanced 1%.

Around 45% of steelmakers were operating at a profit by end-October, versus 56.7% in late September, data from consultancy Mysteel showed.

Dwindling demand also disincentivised mills to ramp up supply, with steel exports in October sliding by 6.6% from a four-month peak in September.

Year to date, output totalled 817.87 million tons with an annual decline of 3.9%.

China’s steel output will slip below 1 billion tons this year for the first time in six years, on track to meet the government’s pledge to reduce production, the state-backed steel association said late last month.

Beijing in late October unveiled a proposal for a more stringent steel capacity swap plan to reduce existing capacity, a move that is set to rebalance supply and demand in the sector grappling with overcapacity.
Source: Reuters