China produces record quantities of steel and aluminium

Together with the data on industrial production, the National Bureau of Statistics (NBS) in China yesterday also published production data on steel and aluminium. In both cases record values were reported for June. According to these figures, steel production rose by 4.5% year-on-year to 91.58 million tonnes. On a daily basis, the 3 million tonne mark was exceeded for the first time. The capacity utilisation rate of the steelworks increased to 92%. China produced 499 million tons of steel in the first half of the year. If the current production rate is maintained, China will produce more than 1 billion tons of steel in one year for the first time in 2020. Steel producers have responded to the increased demand by increasing production. This is the result of robust construction activity and the recovery of the manufacturing sector in general.

According to NBS data, Chinese aluminium production increased by 0.8% year-on-year to 3.02 million tonnes. On a daily basis, a record high production rate of 100,667 tonnes was achieved. In the first half of the year, China produced 17.89 million tonnes of aluminium, 1.7% more than in the same period last year. Significant increases in aluminium prices since April have made production more attractive. The next aluminium contract on the SHFE has meanwhile exceeded the 14,000 CNY per tonne mark again, which is considered the average break-even point for Chinese smelters. In addition, new smelters have started operations. According to information from the state research institute Antaike, new production capacities of around 680 thousand tonnes p.a. were brought to the market in the first half of the year, of which just under 300 thousand tonnes p.a. were brought to market in June.

Source: Commerzbank Research, Photo: Fotolia