High frequency China

Chinese industrial activity looked stronger at the start of March if steel production and coal burn are useful indicators.  The CISA production data lifted again to an average 2.085mt per day in the first 10 days of March.  Production at CISA mills was actually a bit lower, with the estimated small mills accounting for all the gains, so the reality for the month may not turn out to be quite as strong.  But with inventories now starting to fall, it suggests the normal steel usage cycle into mid year is on track.

Coal burn showed an apparent improvement with absolute coal stocks and days of use falling at key power plants, which accounts for ~65% of total coal burn.  The drop to 23 days of consumption implied an uplift of 4.5% on levels seen at the end of Feb, although this is still not strong enough to get excited about thermal coal prices, which seem more likely to fall than rise.