China produced 71.4 million metric tons of pig iron and 82.94 MMt of crude steel in July, down 8% and 9% on the year, respectively, data from the National Bureau of Statistics showed on Aug. 15.

The daily pig iron and crude steel output in July averaged 2.303 MMt and 2.675 MMt, down 7.2% and 12.4% from June, respectively, with both at the lowest levels so far in 2024.

Over January-July, China’s pig iron and crude steel output fell by 3.7% and 2.2%, respectively, on the year to 509.68 MMt and 613.72 MMt, NBS data showed.

Several market participants were concerned about the large drops in pig iron and crude steel output in July, saying steel output cuts should have been limited until late July.

Chinese steel prices have been falling since late July, triggered by strong production, poor steel demand, as well as traders’ panic sales to clear rebar inventories of older standards, trading sources said.

China has mandated that rebars following older standards cannot be produced and sold after Sept. 25.

“If steel production had fallen 12% month on month in July, steel prices wouldn’t have hit a seven-year low in August,” a mill source said.

“Declines in China’s pig iron and crude steel output will accelerate in August, as losses at steel mills have widened. But to my knowledge, steel mills in general are still trying to avoid large output cuts, as they have to ensure cash flow and maintain employment,” the source added.

Most rebar producers are currently facing a loss of over Yuan 200-300/t, with HRC producers at a loss of around Yuan 150-200/t, according to market sources.