Metals Sector Update - China’s Steel Production Continues To Surprise: Motilal Oswal

Steel coils pass through a finishing machine. (Photographer Chris Ratcliffe/Bloomberg)

Metals Sector Update - China’s Steel Production Continues To Surprise: Motilal Oswal

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Motilal Oswal Report

China’s steel production continues to surprise on the upside, with April 2021 production at 97.8 million tonne (highest ever), despite production curbs in the key hub of Tangshan.

Given higher steel prices, producers in other regions have ramped up output to meet the current strong demand (apparent steel consumption in China was 91 million tonne in April-21, implying a two-year compound annual growth rate of 7%).

Continuing high steel production and inventory levels (~20% higher than two years back) could pose a risk to Chinese and regional steel prices, if exports decline, as the rebates have now been removed by the Chinese government.

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Motilal Oswal Metals Update.pdf

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