Like its monthly import data for iron ore, China’s crude steel production figures hold the greatest interest for Australian investors and September was no different with a solid performance.
Figures a week ago showed iron ore imports held up in September (even though Australians exports slipped a little) and yesterday the crude steel production data for last month and the first nine months of the year were also solid, but steel stocks held at steel mills remain higher than a year ago which is a small negative.
For the month, production dipped 2.4% from August’s (which has an extra day) record to 92.56 million tonnes. That was up 11.8% from September last year.
Reuters said average daily output for the month was 3.09 million tonnes, up 0.9% from August and the highest figure since 2014. If an extra day in September is added production would have been around 95 million tonnes, a record.
For the first three quarters, China produced 781.59 million tonnes of steel, up 4.5% from the same period in 2019, the National Statistics Bureau data confirmed.
But total inventories at mills and held by traders were well above 21 million tonnes in September – a typical peak consumption season for construction materials according to Reuters. That was up a third from the 16 million tonnes a year earlier, according to the Mysteel website.
China’s crude steel production has been running at high levels since May with consumption lifted by the country’s infrastructure boom and underpinned by the reviving manufacturing sector.
Reflecting the rising demand from the construction sector, growth in heavy industrial products such as crude steel and cement remained strong – increasing by 10.9% yoy and 6.4% yoy respectively while production of motor vehicles also increased strongly (particularly for new energy vehicles) – up by 13.8% yoy – while electronics rose by 8.0% yoy. Electricity production rose by 5.3% yoy.
China’s Customs Administration said last week that iron ore imports were up 8.2% to 108.55 million tonnes in September from 100.36 million tonnes in August and 99.36 million tonnes in
That saw January-September imports jump nearly 11% to 868 million tonnes and on track to easily top the billion tonne mark with three months of 2020 to go.
September’s total is less than 4% under the all-time high of 112.65 million tonnes set in July.
But Australian iron ore imports weakened – at least from the world’s biggest iron ore export port of Port Hedland.
Port Hedland is used by BHP, Fortescue Metals, and Roy Hill, plus several much smaller shippers.
The Pilbara Ports Authority said exports to China from Port Hedland fell 1% last month from August to 39.74 million tonnes from 40.16 million tonnes in August but rose 10% from the low 36.05 million tonnes a year earlier.
Total iron ore shipments from Port Hedland slipped to 45.57 million tonnes in September from 46.02 million tonnes in August but were up from the 41.97 million tonnes in September 2019.
