It appears Chinese activity remains soggy in early May, but hasn't gotten alarmingly worse. Coal burn is not growing, although this is against stronger hydro generation. CISA steel mill production has picked up and stocks have come down, although confusion reigns over small mill activity.
It probably pays to remain cautious about Chinese growth given the headwinds. But it doesn't look like those headwinds have blown the economy over in the early stages of May.
Coal burn was on par with May 1-10 last year, after showing negative YoY growth over much of April.
There is potential bad news coming for coal in the next few months if hydro generation growth remains strong. Inventories are currently at ~22 days of consumption, which is not dissimilar to this time last year, although the fallout from stronger hydro saw them rise much further.
The CISA production data has become less useful given the apparent re-estimation of small mill activity, which can be a big swing factor. But excluding this, production growth has been ok so far, rising 4.3%YoY in the first 10 days.
Consumption growth is also perhaps a little better than this again, with inventories at CISA mills falling.
So the fallout from a weak property market is yet to seriously undermine steel consumption rates, although growth is not dramatically strong. And for steel making raw materials, it would appear that the current low prices would suggest these growth rates aren't powerful enough to absorb supply.
