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Kallanish Kallanish

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February, 21st 2020

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JAN 17
10:15

Chinese steel output, demand see end-2019 surge

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Chinese steel production picked up again in December, according to official data from the National Bureau of Statistics (NBS). The figures also mean end user demand came close to 900 million tonnes for the first time, Kallanish notes.

In December, Chinese crude steel production was up 11.6% year-on-year at 84.27mt, according to NBS. That was the highest level since August. Over the year, Chinese crude steel output was up 8.3% y-o-y at 996.34mt, just missing the 1 billion tonnes mark. Monthly crude steel production on an annualised basis had topped 1 billion t/y over April-September, supporting expectations that output could top 1 billion tonnes over full year 2020.

Thanks to the fall in steel exports last year, and a pick-up in imports in December, China’s apparent steel demand in December was up 14.4% y-o-y at 76.86mt. Over the full year, apparent steel demand was up 9.4% at 894.48mt.

Inventory levels meanwhile finally picked up slightly over December, leaving total inventory levels little-changed y-o-y. As a result, implied end user buying in December was up 6.02% y-o-y at 76.4mt, and over the full year was up 9.13% at 894.55mt.

Most analysts say that such rapid demand growth is unsustainable in 2020. Pressure on developers to sustain construction levels however mean that demand could still see a small increase this year of around 0.9-1.1%, Kallanish forecasts (see the November edition of Kallanish China Steel Intelligence).