28 Jan

China’s Steel Production Outlook Remains Muted

WRITTEN BY Anuradha Garg

Daily average output slides

Previously, we looked at how Chinese iron ore imports stayed weak last year due to lower steel production. As reported by Reuters, China’s average daily output hit its lowest level in December since March 2018. Average output and total steel production stood at 2.46 million tons and 76.1 million tons, 5% lower and flat compared with November, respectively.

China’s Steel Production Outlook Remains Muted

Record production

Despite steel production’s weakness over the last few months, China’s steel production rose 6.6% YoY (year-over-year) to 928.3 million tons last year, a record. Production cuts were not as strict as they were in 2017, and strong production, even in the winter months, caused mills’ margins to give way. However, as air quality has worsened due to higher production, authorities could impose tighter restrictions, which is limiting steel mills’ restocking.

Outlook muted

Going forward, steel production is expected to cool further as demand wanes in key sectors. China’s steel exports fell 8.1% YoY last year, to 69.33 million tons. Weakening global demand and tariffs could slow exports further, pressuring iron ore prices (PICK) and impacting stock prices for miners such as Vale (VALE), BHP (BHP), and Rio Tinto (RIO).

Latest articles

Hexo (HEXO) had a hard time last week. A lot of headwinds pulled the stock down. However, the stock rose and closed with a gain of 17% on Thursday.

Elliott Management expects AT&T stock to reach $60.0 by the end of 2021 if it adopts the restructuring plan. The stock has a potential upside of almost 60%.

Tesla (TSLA) stock is having a strong run this month. After a weak start, the stock has closed with gains for nine consecutive trading days.

Chipotle is scheduled to report its third-quarter earnings on October 22. Despite the rise in the stock, Chipotle's earnings could drive the stock more.

The Cannabis 2.0 era has officially started. Now, Canadians can legally access a host of cannabis-infused products like beverages, vapes, and edibles.

Despite vaping concerns, Aurora Cannabis plans to introduce vape products in December. Reports of vaping-related illnesses started in late August.