In September 2024, China’s crude steel output experienced a notable decline for the fourth consecutive month, dropping by 1.1% from August and 6.1% from the same month last year. The National Bureau of Statistics announced that the country produced 77.07 million metric tons of crude steel, the lowest monthly output since December 2023. This decline surprised many analysts who anticipated a rebound due to improved seasonal demand and a recent stimulus package introduced by the Chinese government.
Despite the production dip, the rate of decline showed signs of slowing compared to previous months. In August, crude steel output had fallen by 6.1% from July and a staggering 10.4% year-over-year. September’s daily output averaged approximately 2.57 million metric tons, a slight increase of 2.2% from August's 2.51 million metric tons. However, this figure still lagged behind the daily average of 2.74 million metric tons recorded in September 2023.
In late September, Beijing launched a series of aggressive economic stimulus measures aimed at restoring confidence and achieving its annual growth target of around 5%. These measures contributed positively to the steel market, as indicated by a 5.6% month-on-month increase in rebar prices, which reached 3,471 yuan per metric ton by the end of September. As a result, profitability for steel mills improved significantly, with nearly 20% of them operating at a profit by month-end, compared to just 3.9% in late August.
Overall, steel production in China for the first three quarters of 2024 saw a cumulative decline of 3.6% compared to the previous year, totaling 768.48 million metric tons. The challenges facing the sector are multifaceted, involving not just seasonal demand fluctuations but also broader economic factors that influence production capacities and profitability.
