China’s monthly crude steel output slid to a six-month low in last month – but that wasn’t due to any slow down in demand but the production curbs introduced to clear the air in Beijing and other major northern cities for the October 1 70th National Day celebrations.
Total output fell 5.4% to 82.77 million tonnes last month from 87.25 million tonnes in August, the lowest level since March.
But the real story was in comparison with a year ago. The National Statistics Bureau said September production was up from 80.85 million tonnes in the same month last year, indicating that demand remains solid despite the weakness in manufacturing (falling car sales) and construction.
For the first nine months of the year, China lifted output 8.4% to 747.82 million tonnes from the same period in 2018.
China imported 99.36 million tonnes on iron ore in September, up 4.8% from 94.85 million tonnes in August and well above 93.47 million tonnes in September 2018.
For the first nine months of the year, imports 784 million tonnes, down 2.4% from 803.34 million tonnes in the same period a year ago.
The output of consumer electronic products rose strongly – up by 11.4% YoY in September – following on from a softer period between July and August. Similarly, electricity generation also lifted – increasing by 4.7% YoY (compared with just 1.7% YoY previously).
NAB analysts said construction-related heavy industrial sectors grew more modestly – cement production rose by 4.1% YoY (down from 5.1% in August).
Car production was again weak – with output fell 6.9% year on year in September and has fallen for 15 months in a row.
“This sector has been hit by weakness in consumer demand, in part related to restrictions on shadow banking lenders that had come to dominate vehicle financing in recent years,” NAB analysts wrote at the weekend.
The price of 62% Fe iron ore fines fell 60 cents on Friday to end the week at $US86.36 a tonne. That was down 7.9% from $US93.76 a tonne the previous Friday.
