China’s Steel Market: Not as Gloomy as It Seems

Despite a reported decline in China’s crude steel output for November, the overall picture suggests stability in the sector. November production fell to 78.4 million metric tons, a 4.3% drop from October, yet on a daily basis, output showed only a slight decrease compared to previous months.

• Production Stability: Despite a 4.3% decrease in steel output from October to November 2024, China’s overall steel production has remained largely stable since 2019, fluctuating within a narrow range. The yearly production is expected to be around 1 billion tons in 2024, slightly below 2023’s levels but still within the range of the past five years.
• Increased Exports: Steel product exports have significantly increased by 22.6% in the first 11 months of 2024 compared to the same period in 2023. This increase is projected to reach approximately 110 million tons for the entire year.
• Stable Inventories: Steel inventories are not surging, suggesting that most of the produced steel is being consumed domestically. Rebar inventories are even below levels from the same period in 2023.
• Robust Iron Ore Imports: Imports of iron ore, a crucial raw material for steel production, increased by 4.3% in the first 11 months of 2024 compared to the same period in 2023. This indicates continued demand and a healthy supply chain.
• Price Fluctuations and Recovery: While iron ore prices experienced fluctuations throughout 2024, reaching a low in September, they have recovered to $105.66 per ton by the end of December. Lower prices earlier in the year encouraged increased iron ore purchases by steel mills.
• Contrasting Narratives: The article contrasts the seemingly negative headlines based on month-to-month production dips with the reality of long-term stability in the steel sector. The sector’s performance is considered largely steady despite concerns about the residential property sector.