China September crude steel output lowest this year

China September crude steel output lowest this year. China's crude steel output in September eased for a fourth consecutive month, reaching its lowest level this year as policy measures to cool property markets and meet energy-saving targets continued to take a toll on mill furnaces. The production levels suggest steel mills are responding to the government's drive to contain oversupply in a bloated industry, although it isn't clear whether mills have actually eliminated capacity as ordered by the government. Production in September fell 7.7% from August levels, to 47.95 million metric tons, the National Bureau of Statistics said Thursday. Average daily production, a slightly more accurate indicator of output trends, fell in September to 1.598 million tons from August's 1.67 million tons. The market had widely expected lower production in September amid a cautious price revival due to relatively low inventory build-up during the fall holidays, according to data from Chinese consultancy Mysteel. In some cases, reports suggest mills were only told to stop production for a period, presumably allowing leeway to restart once Beijing meets short-term policy targets. The slower output tracked lower iron ore imports in August, but as ore imports rose in September, crude steel output may revive in the fourth quarter. Crude steel production in September last year fell in a similar lull. "Starting in October we see news that plants in Hebei are returning to production that were cut in September's energy efficiency campaign," CLSA Asia-Pacific Markets analyst Scott Laprise said. "We are also concerned that reported numbers can often be understated and production could be coming back faster than we expect." Total output in the first nine months rose 13% on year to 474.53 million tons, the bureau's data showed. China continued to produce more domestic iron ore in September, up 9.4% on year. However, output of pig iron, an intermediate product, tracked crude steel lower, down 6% on year to 45.7 million tons. By Chuin-Wei Yap and Liu Li of Dow Jones Newswires