China’s steel slowdown continues

Steel output in the People’s Republic of China dropped by 4.9 percent in October compared with the prior month, according to that nation’s steel industry trade association.

Citing figures from the China Iron & Steel Association (CISA), S&P Global Platts has reported that China’s daily average output of steel has declined for the sixth straight month, hitting a low not seen in almost four years.

The financial press has reported on the effects of power shortages in parts of China, but the slowing property market and construction of apartment towers may be having an even larger impact on steel demand (and thus output).

Platts notes that Beijing-based property data provider China Index Academy has recorded the value of financing arranged by China’s property developers dropped 60 percent month-on-month in October and is down a whopping 75 percent compared with one year ago. “Not enough steel demand generated in the domestic market has led some mills to operate at losses” since last November, writes Platts.

CISA passes its figures on to Brussels-based Worldsteel, which therefore also has been tracking the decline in steel output in China. Worldsteel notes that in China “there have been marked signs of deceleration in the steel using sector’s activity since July, leading to a steel demand contraction of 13.3 percent in July and then 18.3 percent in August.”

In September of this year, steel output fell 21.2 percent year-on-year compared with September of last year, according to Worldsteel.