China crude steel output hit record high in May

SHANGHAI, Jun 15 (SMM) – China’s crude steel output reached a record high in May, as enticing profits encouraged mills to ramp up production.

About 92.27 million mt of crude steel was produced in China last month, up 8.5% from April and 4.2% from May 2019, according to SMM calculations based on data from the National Bureau of Statistics (NBS) released Monday June 15.

This took the tally for the first five months of 2020 to 411.75 million mt, up 1.9% from the same period last year.

NBS data also showed that China’s pig iron production increased 2.4% to 77.32 million mt in May from a year ago, while output of steel production rose 6.2% during the same period to 114.53 million mt.

For the January-to-May period, China’s pig iron production rose 1.5% year on year to 355.99 million mt, while that of steel products grew 1.2% to 488.19 million mt, recovering from a dip of 0.2% in January-April.

SMM calculations showed that profits at Chinese steelmakers who use iron ore as feedstock averaged 280 yuan/mt in May, which was decent enough to keep mills in high gear.

In June, profits at mills have been narrowed by a spike in ore prices as well as higher coke prices while the gains in prices of steel were more moderate.  

China’s crude steel output is expected to top out or fall in June, in view of new maintenance works at mills which are estimated to take more output offline than the recovery from maintenance.