China’s crudes steel production rates increased yet again in June, nominally bringing production rates to a new record high. Steel demand is declining however and production rates for July are dipping to compensate, Kallanish notes.

China produced 69.47 million tonnes of crude steel in June, up 1.7% from a year earlier. On a daily basis that was 2.32 million tonnes/day, up from the 2.31m t/d seen in April. Although this is the highest figure ever reported officially, revisions to NBS data suggest that output may in fact still have been higher in April and June of 2014.

Apparent steel demand however reversed its gains in May, falling -1.72% y-o-y to 56.2mt in June. Over the first half of the year, apparent steel demand is now down -4.35% y-o-y to 328.77mt. Full inventory data is not yet available but market inventories declined slowly but steadily through June, while steel mill inventories were increasing. Implied end user buying is therefore expected to be down slightly month-on-month on a daily basis, confirming what we heard in the market at the time.