Chinese steel mills are whimpering under the recent fait accompli of local governments to cut down on power consumption during December by 50% to reduce pollution. Impacting the steel hubs of Hebei production has suffered in November is likely maintain downtrend in December as well.

According to the figures from National Bureau of Statistics (NBS), China has produced 712.86 million tonnes of crude steel in the first eleven months of this year, up 7.8 percent year on year.

However in November, production of crude steel was 60.88 million tonnes, up 4.2 percent year on year. Daily crude steel production was 2.029 million tonnes, down 3.3 percent month on month.

Slippage in production has been complimented by drop in the inventory levels of long and flat products. Long and flat product inventory levels have dropped as follows during the last week

WRC : -3.72%
Rebar : -11.13%
HRC : -4.6%
CRC : -2.88%

It is expected that with production under pressure and even at below average level of demand inventory levels will shrink further thereby imparting stability to modulated buoyancy in steel prices in coming weeks.
 

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