The Chinese Government sure is stubborn, and has gone full throttle on those steel production cuts most people doubted it would achieve.

The latest figures out of China, which threatened to keep output from steel mills at 2020 levels this year despite outpacing them by 12.2% in the first half of the year, show the country’s daily production slipped to its lowest level in more than 2 & ½ years.

It has now produced 805.89Mt to the end of September, just 2% above 2020 levels when averaged out to an annual basis.

China produced 73.35Mt of steel in September, down from 83.24Mt in August and 21.2% lower than a year earlier, National Bureau of Statistics figures showed.

That came amid both official measures to quell steel production to rein in pollution ahead of next year’s Beijing Winter Olympics, as well as power rationing caused by shortages of coal.

According to Reuters, electric arc furnaces, which use mostly scrap material to produce crude steel, were among the worst effected plants.

More reliant on grid electricity than traditional blast furnaces, EAF utilisation rates slid to 49.22% in the last week of September, down 21.09% a year earlier.


Iron ore miners not feeling the pressure

Any negative sentiment from the figures is yet to trickle down to the iron ore majors.

Rio Tinto (ASX:RIO) recovered, gaining 1.9% today after a less than impressive quarterly report on Friday took the shine of its share price.
BHP (ASX:BHP), which will report its September results tomorrow, and Fortescue (ASX:FMG) were also up by almost 1%, while Mineral Resources (ASX:MIN) was flat.

Dalian iron ore futures slumped below 700 Yuan in early trade today but have rebounded to a loss of just 1.2%. Iron ore was fetching around US$125/t on Friday.

Gold miners were off, with Evolution (ASX:EVN) and Northern Star (ASX:NST) among the weaker performers in the ASX 300, but rising base metals prices and excitement in the lithium space drove the Materials index to a 0.97% gain.

Lithium aspirant Vulcan Energy (ASX:VUL) announced an offtake deal to supply lithium hydroxide from its Zero Carbon Lithium Project in Germany to battery materials refiner Umicore, sending its shares up by 9.52%.

Nickel miners Nickel Mines (ASX:NIC) and IGO (ASX:IGO), copper plays 29Metals (ASX:29M), South32 (ASX:S32) and OZ Minerals (ASX:OZL) and rare earths miner Lynas (ASX:LYC) all enjoyed good days as base metals prices surged.


Monsters of Rock share prices today: