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China June crude steel output slips as bad weather hits construction

China’s crude steel output fell 3.3% in June compared with a year earlier, according to data from the statistics bureau, as bad weather in recent weeks hit construction activity.

The world’s biggest steel producer churned out 90.73 million tonnes of the metal last month, according to data from the National Bureau of Statistics (NBS) on Friday.

That was down 6% from 96.61 million tonnes in May.

Average daily output in June was 3.02 million tonnes, according to a Reuters analysis of the NBS data. That compares with 3.12 million tonnes of daily production in May.

China has seen severe weather conditions since June, with heatwaves in northern and central China driving temperatures up to 40 degrees Celsius while heavy rains caused floods in the south.

Several mills in China, the world’s top steel producer, have also idled production facilities or placed them under maintenance earlier than usual due to weak margins and high inventories.

Iron ore imports into China in June also slipped from a year earlier, though only modestly, on the back of weaker demand from the steel industry.

“Although weather disruptions exaggerated what is a typical retreat in June, the underlying trend in Chinese steel production remains positive,” said Alistair Ramsay, vice president, Rystad Energy metals, ahead of the statistics bureau data release.

“We forecast steel production will restore its upward momentum in Q3 to reach 276.65 million tonnes before policy makers stress and steelmakers withdraw. Output will slip to 261.74 million tonnes in Q4.”

In the first half of 2022, China made 526.8 million tonnes of steel, down 6.5% from same period a year ago, the statistics bureau said.
Source: Reuters (Reporting by Emily Chow in Kuala Lumpur; Editing by Tom Hogue and Edwina Gibbs)

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