SHANGHAI, July 29 (Reuters) – China produced an average 1.65 million tonnes of steel per day in the middle of July, 2.4 percent lower than the first 10 days of the month, data from the China Iron & Steel Association (CISA) showed on Thursday.
In the data seen by Reuters, CISA said output from China’s major steel producers, thought to include the country’s 61 biggest mills, fell by 3 percent to 1.34 million tonnes in the middle 10 days of July, the second straight fall this month.
The latest output rate translates into 602 million tonnes on an annualised basis, still 6 percent higher than last year’s record.
With demand still uncertain and prices dropping, a number of small- and medium-sized mills have already slashed output and even closed down some of their facilities as stockpiles soar.
But the market has been looking closely at production volumes from China’s biggest steel enterprises to see whether they will follow suit.
“Big steel mills won’t have plans to cut production, but some have scheduled overhauls for the summer,” said Xu Zhongbu, chief executive of Beijing Metal Consulting.
Xu said it was difficult to draw conclusions from the output figures for less than one month, and suggested the industry was still failing to recognise the true extent of its problems, especially after a brief price recovery last week.
“Last week’s price increases will not be a good thing for the steel market and might have persuaded some mills to abandon their plans to cut output.” (Reporting by Ruby Lian and David Stanway, Editing by Ken Wills)