China’s January-November steel output remains down on the year, but figures are set to rebound every month after steel makers completed 2021 output cut requirements. Steel production is set to increases in December and beyond and see improvement in margins as expectations that additional monetary easing and supportive property and infrastructure policies will take effect next year. Jan-Nov saw crude steel output reach 946.4 MMT, down 2.6% on the year. Pig iron output fell 4.2% y/y to 796.2 MMT.

China steel production cap in 2022 is set to be the at the same level as 2021’s but steelmakers have pushed for boosts in output for December in efforts to raise the output quotas for 2022, according to some market sources. China’s crude steel output in Q1 of 2022 is set to be close but not exceed the level of 3 MMT/day as seen in Q1 2021, but Q1 output in 2022 is likely to be much higher than November’s level in 2021.

Healthy profit margins have also been driving the increase in steel production. China’s domestic hot-rolled coil and rebar sales profit margins were USD 106/ton and USD 116/ton on December 14. Future prices hinge on China’s property and infrastructure markets. Infrastructure fixed asset investments fell 4% on the year, while new property projects fell 21% on the year in November.