October 27, 2011 / 9:11 AM / 8 years ago

RPT-UPDATE 1-China's daily crude steel output plummets in October

(Repeats to fix table format)	
    * Average daily steel output falls below 1.9 mln T first
time since Feb
    * More mills use maintenance overhauls to curb steel output
    * Daily average steel output expected to stay below 1.8 mln
T in months ahead

    SHANGHAI, Oct 27 (Reuters) - China's average daily crude
steel output dipped to 1.7998 million tonnes over the Oct 11-20
period, the first time it has fallen below 1.9 million
tonnes since February, data from the China Iron & Steel
Association (CISA) showed on Thursday.	
    A growing number of Chinese steelmakers have begun overhauls
at their facilities as they try to shield themselves from a
steep decline in steel prices and a slowdown in sales, with
Beijing's tightening moves continuing to weigh on demand.	
    "Many steel mills have expensive raw materials, which they
bought earlier at high prices, and steel prices have fallen
rapidly entering October, so we are seeing more overhauls by
steel mills as their margins worsen," said Hu Yanping, an
analyst with industry consultancy Custeel.com.	
    The utilization rates at 111 rebar and wire rod rolling
mills in northern China's Tianjin city and Hebei province stood
at 75.2 percent this week, down 10 percentage points from a week
earlier, a Custeel.com survey showed.	
    CISA originally said that daily output in the first 10 days
of October reached 1.934 million tonnes, suggesting the
country's mills were still producing at very high rates despite
the woes facing the sector. 	
    But according to the association's latest data, accumulated
output over the first 20 days of October stood at 36.357 million
tonnes, indicating that it has revised its output numbers for
the first 10 days of the month to 1.836 million tonnes,
according to Reuters calculations.	
    China's steel mills had been operating close to full
capacity since late February, defying a government-driven credit
crunch and constant warnings about overcapacity.	
    "It is clear that everybody in the sector, especially long
product producers, was too optimistic," said Xu Zhongbu, chief
executive of Beijing Metal Consulting.	
    Analysts expected China's crude steel output to fall further
in the months ahead, with daily average production to stay below
1.8 million tonnes.	
    But that figure remains significantly higher than 2010, when
average daily output stood at around 1.7 million tonnes.	
    "Production is slowing but the total is still going to be
around 700 million tonnes this year, which is the highest in
history," said Xu. "Next year it will be lower."  	
    The following table shows changes in daily output since the
beginning of the year.  	
	
 Period         Daily   Change 
                output  (pct)
                (mln    
                T)      
 Oct 11-20      1.799   -2.0
 Oct 1-10*      1.836   -4.8
 Sept 21-30     1.930   +0.6
 Sept 11-20     1.919   -2.3
 Sept 1-10      1.964   +3.1
 Aug 21-31      1.905   -2.2
 Aug 11-20      1.947   +0.3
 Aug 1-10       1.942   +0.4
 July 21-31     1.935   -0.7
 July 11-20     1.950   -0.3
 July 1-10      1.955   -3.1
 Jun 21-30      2.018   +3.2
 Jun 11-20      1.955   -0.6
 Jun 1-10       1.967   +2.7
 May 21-31      1.915   +3.5
 May 11-20      1.984   +1.9
 May 1-10       1.947   +0.3
 Apr 21-30      1.941   +1.9
 Apr 11-20      1.904   -1.1
 Apr 1-10       1.933   +0.6
 Mar 21-31      1.922   -1.2
 Mar 11-20      1.945   +2.2
 Mar 1-10       1.903   -0.4
 Feb 21-28      1.912   +5.4
 Feb 11-20      1.814   +1.5
 Feb 1-10       1.787   +4.5
 Jan 21-31      1.710   +0.9
 Jan 11-20      1.695   -5.5
 Jan 1-10       1.794   +3.5
	
 Source: CISA data. * Revised based on Reuters calculations.	
    	
	
 (Reporting by Ruby Lian and David Stanway; Editing by Jonathan
Hopfner and Ken Wills)
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