China’s key industrial production may have bounced by a larger-than-expected annual 6.7% in April, but it did so without any help from the country's key steel sector.
In fact, China's crude steel output surprised with a significant fall in April.
Crude steel output fell to 85.94 million tonnes in April, down from 88.3 million tonnes in March.
Many analysts had forecast a monthly rise, citing improving demand and profit margins that were supposed to drive a rise in output. However, the National Bureau of Statistics reported crude steel production fell 2.6% from March and 7.2% from April 2023, when demand was recovering from two years of lockdowns.
April had one fewer day, which could account for the lower output, explaining the month-on-month fall, but not the dip from a year ago.
At 343.67 million tonnes in the first four months of 2024, China’s crude steel production is now 3% below the level of the first four months of 2023.
Chinese analysts expect demand to improve in May as production resumes or is stepped up at more mills.
Interestingly, there’s been no sign of the mooted return of production management quotas by the government, which were promised two months ago.
The dip in steel is not a problem because that reflects the current state of demand in China, especially with property still under pressure and not using much material.
The slide in crude steel output came as iron imports held up in April from March.
Customs data last week showed China’s April iron ore imports rose 1.1% from March to 101.82 million metric tonnes. That was higher than 100.72 million tonnes in March and 90.44 million tonnes in April 2023. China’s iron ore imports in the first four months of 2024 totaled 411.82 million tonnes, up 7.2% from the same period in 2023.
Data from the Pilbara Ports Authority showed another solid performance by iron ore exporters through Port Hedland in April, especially to China.
Last month saw total exports from the likes of BHP, Roy Hill, and Fortescue ease a touch to 49.5 million tonnes from 50.08 million in March.
Exports to China in April at 42.57 million tonnes were also down a tick from March’s 42.85 million tonnes. But from April 2023’s China export figure of 35.525 million tonnes, last month saw a massive 20% surge in exports. Port Hedland shippers accounted for more than 41% of China's total iron ore imports in April.
Iron ore prices on the SGX platform in Singapore rose above $US119 a tonne on Monday, for the second time in a fortnight.
