China’s July crude steel output eases from prior month on regional production curbs

BEIJING (Reuters) – China’s crude steel output in July eased 0.34% from the prior month, the statistics bureau said on Tuesday, because of production restrictions in Tangshan city in northern China and Sichuan province in the southwest.

The world’s largest steel producer manufactured 90.8 million metric tons of the ferrous metal last month, down from 91.11 million tons in June but up 11.5% from the same month in 2022, when steel mills cut production amid shrinking margins as property sector woes stifled demand.

Average daily steel output in July came in at about 2.93 million tons, down 3.6% from 3.04 million tons in June but up from 2.63 million tons in July 2022, according to Reuters calculations based on NBS data.

The month-on-month decline in steel output was mainly because of production restrictions in Tangshan, with output there contracting obviously from July 20, said Cai Yongzheng, a Nanjing-based director of Jiangsu Fushi Data Research Institute.

Tangshan, China’s top steelmaking hub, intensified its production controls in late July by requiring some mills to suspend operation of at least one blast furnace until the end of July, cutting about 488,200 tons of hot metal output from blast furnaces, consultancy Mysteel said in a report.

This came after Tangshan city had asked local mills to cut their sintering production by between 30% and 50% in July in a bid to improve local air quality.

Also, a number of steel mills in southwest China’s Sichuan province scaled down production to ensure normal power supply during the holding of the FISU Summer World University Games over July 28-Aug. 8 in Chengdu, the capital of Sichuan.

China produced 626.51 million tons of crude steel in the first seven months of the year, up 2.5% from the same period the year before, NBS data showed.

(Reporting by Amy Lv and Andrew Hayley in Beijing; Editing by Kim Coghill and Tom Hogue)