China's August steel output drops to eight-month low as margins shrink

China's crude steel production slowed to an eight-month low in August, as steelmakers trimmed output and stretched out maintenance schedules in response to shrinking margins.

According to data released by the National Bureau of Statistics, the country produced 74.61 million metric tons of crude steel last month, a decline of 3.7% compared with August a year earlier. On a daily basis, that equates to an average of 2.41 million tons, the weakest pace since December 2025.

The month-on-month drop of 3% reflects a broader pullback by mills facing a squeeze from both sides of the market. Input costs, particularly for feedstock, have remained elevated, while demand for steel from the construction and manufacturing sectors has stayed subdued.

Profitability across the industry has deteriorated sharply. Consultancy Mysteel data shows that only about a third of steelmakers were operating in the black in August, down from 39% in July and a much healthier 66% in the same month last year.

With margins under pressure, several producers opted to prolong equipment maintenance or reduce production runs rather than keep furnaces at full capacity. The cutbacks helped push daily output to its lowest level in eight months.

For the first eight months of 2026, total crude steel output reached 651.85 million tons, representing a 3.1% decline on an annual basis. The figures underscore the challenges facing the world's largest steel producer as it navigates a sluggish domestic market and persistent cost pressures.