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China Oct steel output hits 7-mth low on National Day, lower margins

China-Oct-steel-output-hits-7mth-low-on-National-Day-lower-margins-4255.jpg      China Oct steel output hits 7-mth low on National Day, lower margins


China’s steel output fell to a seven-month low in October, official data showed on Thursday, as operations at mills were crimped by a week-long national holiday and shrinking profits.

The world’s top steel-making country produced 81.52 million tonnes of crude steel in October, down from both 82.77 million tonnes in September and 82.55 million tonnes a year earlier, data from the National Bureau of Statistics showed. That marked the lowest level since March.

Average daily output of the industrial metal was 2.63 million tonnes, down from 2.76 million tonnes in September, according to Reuters calculations based on the official data.

The decline in steel output also came amid several waves of anti-pollution alerts, where government seeks to curb output to cut emissions and reduce smog.

Utilisation rates at steel mills in the first week of October – covering China’s week-long National Day celebrations – plunged to 56.2%, the lowest in more than seven years, data compiled by Mysteel consultancy showed.

Steel output was also curtailed by poor profits at mills.

Besides surging iron ore prices that have pressured steel firms this year, analysts also noted that output from electric arc furnaces has been affected by higher scrap steel prices.

“The price for steel scrap increased by almost 100 yuan ($14.30) per tonne in October from a month earlier,” said Tang Chuanlin, analyst with CITIC Securities, attributing it to a supply shortage and seasonal factors.

“Output will continue to drop over the last two months of the year,” Tang said before the release of data.

The China Iron and Steel Association said last month it expected the country’s crude steel output for 2019 to rise 7% from a year earlier to around 994 million tonnes.

For the first 10 months of the year, China churned out 829.22 million tonnes of steel, up 7.4% from the same period last year, the data showed.
Source: Reuters (Reporting by Min Zhang and Shivani Singh; Editing by Tom Hogue and Richard Pullin)

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