Chart of the Day: China’s Steel Output Hits Record High in May
China churned out more steel in May than in any month since records began in 1986, according to data from the National Bureau of Statistics, as some segments of the economy bounce back from the pandemic.
The country produced a total of 92.27 million tons last month, up 4.2% year-on-year, with daily average output approaching 3 million tons.
Despite the impact of the pandemic in the first few months, steel production was up 1.9% for the first five months.
Even as some parts of the economy continued to struggle, industries such as infrastructure construction and real estate — major sources of steel demand — have seen pent-up demand unleashed as virus control measures are rolled back.
Iron ore, which makes up 35% to 40% of steel’s total production cost, saw a surge in prices. Iron Ore 62% Fe, CFR China — a grade of ore widely exported to China — saw its price recover to the pre-virus level of around $95 in late May, and is now hovering around $100 on strong demand.
But the market expects a gradual fall in steel demand in the following months, with analysts saying the second quarter is usually the annual peak.
Contact reporter Lu Yutong (firstname.lastname@example.org)
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