In September, China experienced a significant decline in steel production and crude oil refining, while the output of other key commodities showed an upward trend. According to data released by the statistics bureau on Friday, steel mills produced 77.07 million tons in September, marking the lowest monthly output this year. Consequently, production for the first nine months of the year is down by 3.6%. Meanwhile, oil refining fell to a three-month low of 58.73 million tons, primarily due to seasonal maintenance shutdowns, resulting in a year-to-date decline of 1.6%.
In terms of profitability, steelmaking and oil refining have emerged as the least successful industrial sectors in China this year, primarily due to the ongoing property crisis and efforts towards decarbonization. Steel mills are compelled to reduce production as the industry grapples with a deepening downturn. Simultaneously, refiners face a long-term decline in gasoline consumption, attributed to the electrification of China’s automotive fleet, while diesel demand is weakening as construction activity slows.
On a more positive note, China’s coal output has shown promising signs, with September figures reaching the second-highest level on record. This surge follows earlier data indicating that coal imports have soared to an all-time high, as the government prioritizes ensuring adequate fuel supplies for factories and households during the colder winter months.
Natural gas production also saw an increase compared to last year, adding to the supply of power fuels despite weakening industrial demand and a significant rise in renewable energy contributions.
Additionally, aluminum production has risen, with expectations of continued growth in output throughout the remainder of the year, buoyed by ample power supplies.
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