Steel 1st Take: China Crude Steel Daily Output: -7.5% (vs. Mid Oct, Member Steelmakers)

Fact: Total crude output for CISA’s 90-membersteelmakers in late-Oct declined 7.5% from mid-Oct, to1.63 mn tons/day (-8.7% MoM). No estimates have beenreleased for the nationwide figure since late April.

    Our view: Positive for Japanese blast furnace industry.

    In China, it appears that production cuts in Beijing andsurrounding areas leading up to APEC forum (Nov 5-11)are starting to contribute as planned.

    Visibility on steel demand ahead remains limited, andour main scenario is that production discipline willcontinue through year-end.

    That said, if key raw materials for steel continue to decline,we should note risk of only short-term production cuts dueto improved spreads.

    Meanwhile, blast furnace operating rates as of Oct 30 inthe high-density Tangshan region, our focus, rose1.4ppt from Sep 23, to 94.1% (98.6% in early 2013).