Data released by the China Iron and Steel Association on Aug. 25 showed that daily pig iron and crude steel output at CISA member mills averaged 1.835 million metric tons and 1.969 million mt, respectively, over Aug. 1-20. The figures were still 0.9% and 0.3% higher, respectively, than the daily averages recorded in July, although they were down 4.4% and 6% year over year.

Market participants said the lower year-over-year production levels had not prevented inventories from rising, highlighting that demand had fallen even more sharply.

Finished steel inventories at mills and major spot markets monitored by CISA reached 28.04 million mt as of Aug. 20, up 7.5% from the end of July and 16.8% higher than a year earlier.

The first mill source said their company experienced insufficient order intake in July, resulting in higher steel inventories. Although orders improved somewhat in August, they remained below year-earlier levels.

“September is traditionally a peak season for both construction and manufacturing steel demand, so domestic steel consumption should improve from August levels,” the source said. “However, whether demand can recover to last year’s level remains uncertain.”