UPDATE 1-China September crude steel output hits 21-month low on sluggish demand

(Adds specific figures in paragraphs 1-3 and 10) BEIJING, Oct 20 (Reuters) – China's crude steel output hit a 21-month low in September, as mills faced sluggish demand and shrinking margins. The world's largest producer of the product manufactured 73.49 million metric tons of crude steel last month, the lowest level since December 2023, data from the National Bureau of Statistics showed on Monday. That was down 4.6% from a year earlier and 5% lower than the 77.37 million tons in August. Average daily output in September was 2.45 million tons, down from 2.5 million tons in August, according to Reuters calculations based on the data. China's steel consumption typically peaks in September due to construction activity, but powerful typhoons hit several coastal regions last month, curbing outdoor operations and hurting demand. The weaker-than-expected demand, coupled with narrowed margins, deterred steel makers from ramping up output, analysts said. Profitability among mills fell, with around 57% of steel makers operating at a profit by the end of September, down from 64% in late August, according to data from consultancy Mysteel, as costs of key raw materials such as iron ore rose. Output was also lower in part because of a temporary curb on mill operations in northern regions to cut pollution ahead of a military parade last month, said Pei Hao, an analyst at international brokerage Freight Investor Services. "A shaky confidence in steel demand amid a protracted property market downturn propelled mills to maintain a cautious production pace," Pei said. For the first three quarters of the year, output totalled 746.25 million tons, down 2.9% from a year earlier. (Reporting by Amy Lv and Colleen Howe; Editing by Thomas Derpinghaus.)

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