China Steel Output Hits First 70 Million Tonnes in May

Chinese steel products output exceeded 70 million tonnes per month for the first time in May. The output was 71.22 million tonnes in May, which increased by 3.1% from April and represented upward for 3 straight months. The production totaled 326.29 million tonnes for January-May, which increased by 27.5% from the same period of 2009. Increasing steel supply causes Chinese steel market price down and Chinese steel export increase when domestic steel demand is weakening along government’s financial squeeze measure.

Chinese crude steel output hit the monthly record high at 56.14 million tonnes in May. The output increased by 1.3% from April and represented upward for 3 straight months. The production totaled 268.9 million tonnes for January-May, plus by 23.8% from the same period of 2009.

The steel product output may exceed 80 million tonnes per year and the crude steel production could approach 70 million tonnes per year in 2010 if the productions continue to increase. Strong steel supply causes raw material price upsurge and steel market price down globally.

Chinese steel product export increased by 14.6% to 4.94 million tonnes in May from April. The export increased for 3 consecutive months and exceeded 4 million tonnes for 2 months in a row when Chinese steel market price is lowering while offshore demand is increasing. The export totaled 17.96 million tonnes for January-May, expanding by 2.3 times over the corresponding period of 2009.

Meanwhile, Chinese steel import decreased by 9.3% to 1.36 million tonnes in May from April. Iron ore import decreased by 6.2% to 51.9 million tonnes, minus for 2 months in a row though above 50 million tonnes for 3 consecutive months. Iron ore import for January-May increased by 8.4% year-to-year to 262.17 million tonnes.

Averaged export price of steel products surged by US$ 46 or 6.1% to US$ 804 per tonne in May from April though domestic market price was weak. Averaged import price upped by US$ 14 or 1.2% to US$ 1,224 per tonne. Iron ore import price rose by US$ 17.2 or 15.5% to US$ 128.5 per tonne.