BEIJING :China’s November steel output fell 6.5 per cent from the previous month, official data showed on Thursday, as some steelmakers cut production to curb losses amid persistently weak demand.
The world’s top steelmaking country produced 74.54 million tonnes of the metal last month, according to data from the National Bureau of Statistics, down from 79.76 million tonnes in October.
“Steelmakers voluntarily cut their production last month because their businesses were still losing money,” said Zhuo Guiqiu, an analyst at Jinrui Futures.
The average profits for main steel products were -160 yuan (-$22.99) and -127 yuan a tonne in October and November, respectively, according to Zhuo.
Average profit in December so far is even worse, at -200 yuan a tonne.
“Whether we will see a recovery in steel output soon depends on when profits will improve,” Zhuo said.
Steel production in China has been unprofitable for much of 2022.
Production was up 7.3 per cent in November from a year earlier. But in November 2021 it was at a multi-year low of 69.31 million tonnes because of major power shortages and curbs on polluting industries.
November’s average daily steel output was 2.49 million tonnes, according to Reuters calculations, the lowest in a year.
China’s ailing property market has reduced demand for steel.
Also, steelmakers in Shanxi and Jiangsu provinces had to lower production last month to meet capacity control targets, an iron ore trader said ahead of the data release.
Imported iron ore stocks at Chinese ports rose during November, reaching 138 million tonnes on Nov. 25 before beginning to fall, SteelHome consultancy data showed.
Total steel production from January to November came to 935.11 million tonnes, down 1.4 per cent on the same period last year, the data showed.
That compared with a 2.2 per cent annual contraction for January-October.
($1 = 6.9593 Chinese yuan renminbi)