According to industry consultancy Mysteel, China’s daily crude steel output remained resilient in the last ten days of December, reaching 1.645 million tonnes just 1.5% short of an August all time high.

According to Reuters calculations, with daily production levels more or less unchanged over the month, total output for December is likely to exceed 50 million tonnes around 5% higher than November. The figure would put China total output for the year at around 569 million tonnes up by 13.8%YoY despite the global economic downturn and a 58.5% slump in China's steel export volumes over 2009.

China produced a record high of 1.67 million tonnes per day in August, leading to a panic about overcapacity and an alarming decline in prices lasting until the middle of October. However, despite the economic downturn, domestic demand backed by a massive CNY 4 trillion stimulus package a surge in real estate demand and a record rise in automobile sales has proven far more robust than many in the industry predicted and prices throughout the country have been recovering since.

According to a research note from China Guosen Securities, inventories of long products used mainly by the real estate sector rose 6.86% in December to end the month at 5.63 million tonnes, but flat product stocks used in cars and consumer goods fell 1.3% over the same period to end at 5.32 million tonnes.

Customs figures on Sunday revealed that China imported 62.16 million tonnes of iron ore in December up by 21%MoM compared with the previous month and close to its October record. However, the rise appears to have had little impact on iron ore stockpiles at China major ports which remained at around 65 tonnes to 66 million tonnes over the course of December.

Spot market iron ore prices on the domestic market have been soaring with Indian 63.5% fines ending last week at USD 130 to USD 133 up by 17% since the beginning of December.

Sourced from Reuters

• [Editor:editor]