Chinese steel production for October came in broadly in line with the 5-year average of 80.0 MMT as the National Bureau of Statistic reported production of 79.8 MMT, down 8.3% MOM but up 11.4% YOY. This brings steel production in line YTD with last year.

The raw material intensive pig iron production was 70.8 MMT for October, down 4.2% MOM but up 12.4% YOY. Pig iron production came in 6.5% over the 5-year average for October, and now stands 2.6% above last year YTD. After strong steel production at the start of the year, we see volumes converging towards the historical averages into the seasonally weaker winter months.

Chinese coal production tallied 370.1 MMT in October, down 4.3% MOM but up 3.6% YOY, bringing the total YTD growth 13.3% higher than last year. Hence, coal production remains high as China continues to build strategic stockpiles as previously announced, while still keeping up imports. However, the elevated production numbers cast shadows on long term import demand from one of the major coal importers. Still, in the current markets, we believe coal exports should find an alternative importer.