China's March crude steel output slides on production cuts
March output down 7.8% yr/yr
Q1 output down 1.9% yr/yr
April output expected to rise-analysts
Adds an analyst comment in paragraph 5
By Amy Lv and Andrew Hayley
BEIJING, April 16 (Reuters) -China's crude steel output in March fell 7.8% from a year earlier as steelmakers cut production amid weaker-than-expected demand and growing inventories, but the decline was somewhat less than forecast.
The world's largest steel producer manufactured 88.27 million metric tons of crude steel last month, data from the National Bureau of Statistics showed on Tuesday.
That represents an average daily output of about 2.85 million tons, versus 2.8 million tons over January-February and 3.09 million tons in March 2023.
Analysts had expected a decline of more than 10%.
"The March output is a bit higher than our expectations, but that's not a surprise after steel exports in March beat expectations," said Kevin Bai, a Beijing-based analyst at consultancy CRU Group.
A faltering recovery in demand after China's week-long Lunar New Year holiday put intense pressure on steelmakers despite a steep fall in the prices of raw materials for steelmaking. Many mills also had high levels of stocks that had been produced at high cost levels.
Several provincial steel associations issued statements in mid-March calling for voluntary reductions in production to halt persistent price declines that have eroded steel margins and market confidence.
The capacity utilisation rate among blast-furnace based steelmakers surveyed fell to 82.76% by end-March, versus 83.59% in late February and 90.56% at roughly the same time last year, data from consultancy Mysteel showed.
In the first quarter of 2024, China produced 256.55 million tons of crude steel, down 1.9% year on year.
Output in April is expected to pick up, analysts said.
"Downstream steel demand has showed signs of improvement in April so some mills have restarted production after equipment maintenance, which can been seen in the increase in hot metal output," said Xu Xiangchun, director of content at Mysteel.
The government's announcement that it will continue to manage crude steel output this year has also sparked hopes that fundamentals for the industry will improve.
Reporting by Amy Lv and Andrew Hayley; Editing by Edwina Gibbs
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