The world’s biggest steel producer pushed output to a record last month as mills in China fired up plants to take advantage of a price surge since the start of the year that has rescued profit margins.
Output rose 2.9 percent to 70.65 million tonnes from a year earlier, the Chinese National Bureau of Statistics said yesterday.
That is the highest ever, according to data from state-owned researcher Beijing Antaike Information Development Co (安泰科信息開發). Still, for the first quarter, supply fell 3.2 percent to 192 million tonnes.
The country’s steelmakers are ramping up output after cuts at the end of last year fueled a major price surge that has rippled out to world markets.
“It’s normal to see higher output in March, but this is a significant increase,” said Kevin Bai, a Beijing-based researcher at consultancy CRU Group. “Right now, the mills are making money. The market is still relatively tight and this has encouraged some producers to return.”
The steel rally would soon end as Chinese mills lift output and traders end a flurry of restocking, HSBC Holdings PLC analysts said in a note on Thursday.
China accounts for about half of global steel supply, with output used in everything from cars to skyscrapers. The country exported a record amount last year, triggering a rise in trade tensions, battering profits at world producers and forcing India’s Tata Steel Ltd to offload its ailing UK business.
Most observers still expect China’s steel production and demand to drop this year as policymakers pivot away from heavy industry. Output will probably decline to 781 million tonnes this year from 806 million tonnes last year, according a projection from Australia, the world’s largest shipper of iron ore.
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