China's rising steel output, improving seasonal demand set to keep prices volatile

Daily pig iron output rose 3.3% month on month to an average 2.35 million mt/day in August, while crude steel production increased 2% from July to 2.680 million mt/day, China Iron and Steel Association data showed.

Pig iron output was up 1.8% on the year in August, but crude steel slipped 0.2% over the same period, according to the CISA.

Finished steel inventories at steel mills and spot markets monitored by the CISA fell 7.2% from end-July and 1% from a year ago to 25.13 million mt Aug. 31.

Some sources expect China's September crude steel output to rise to nearly 3 million mt/day, largely offsetting pricing gains due to recovering demand.

"Due to the drag from the debt-laden property sector and another round of COVID resurgence, end-user demand, especially for long steel, has been modest so far in September," a market participant said. "Oversupply could surface again if demand fails to improve further."