China’s Crude Steel Output in July Falls Severely on Crackdown
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China’s Crude Steel Output in July Falls Severely on Crackdown

China’s crude steel output fell in July to the lowest monthly level since April 2020 as authorities stepped up production controls designed to

China’s crude steel output fell in July to the lowest monthly level since April 2020 as authorities stepped up production controls designed to meet a target of keeping output unchanged from last year as Chinese government bids to cap carbon emissions. National Bureau of Statistics showed that China produced 86.79 million tonnes of crude steel in July 2021, falling 7.6% from June and 8.4% from 93.36 million tonnes in July 2020. In the first seven months of the year, China made 649.33 million tonnes of steel, up 8% from the same period a year earlier. In the January-July period this year, China produced 533.5 million tonnes of pig iron, up 2.3% YoY and finished steel outputs totalled 809.02 million tonnes up 10.5% YoY

Such more visible reductions in steel production are due to the inspections at mills and tighter controls on production and emissions by the government. Moreover, weak seasonal demand has added to the pressure. Since late June, Beijing has dispatched inspection teams to local governments and mills to check that cuts in steel capacity and output are being implemented, shutting down outdated blast furnaces and limiting production at more heavily polluting plants.

China Iron and Steel Association said last week “We should focus on reducing crude steel output at companies with poor environmental performance, high energy consumption and outdated technology and equipment and to ensure 2020 crude steel output falls from a year earlier.”

The association and analysts expect steel demand in China to cool in the second half of the year due to slowing construction activity and still-tight semiconductor supplies that are constraining manufacturing and metals demand in the auto sector.

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