Resounding growth in production of long and flat products has enfeebled sentiments in steel market. Highly sensitive industry has been prone to indulge in production surge at even faint uptick. Taking cue from spirited run in August and September production picked up in September.

Crude steel production touched second highest levels of 65.42 million tonne in September. However October has shown relapse with production dropping 2.128 million tonne per day in the first 10 days of October from 2.152 million tonne in the last 10 days of September.

However the burden of overproduction in September will be carried for some time before the balance is regained. China’s rebar output in September hit a new record high of 18.3 million tonnes, up 1.67% month-on-month from August’s 18 million tonnes.

Likewise the deluge remained prevalent in flat product market price. In September, China produced 15.7 million metric tons up 1.9% from August.

Price levels have dropped by 1% in the last fortnight. The saving grace is that the slide has not been steep since mills have adapted quickly to the changing market dynamics and have been doling out lucrative discount to the traders who have maintained average transaction volume.

Since most of the mills have opted for roll over prices in November with few even taking that extra step back by reducing prices the verdict is clear. Cut down production to contain damage.
 

CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index