SHANGHAI, May 8: China’s daily crude steel output hit a record high of 2.026 million tonnes in April, industry data showed on Tuesday, as the country’s steelmakers sustained high production despite a slow recovery in demand.
The latest estimate trumps the previous daily average record of 1.986 million tonnes in March, based on data released earlier by the National Bureau of Statistics.
Chinese steelmakers have lifted production on expectation of a seasonal rebound in demand between March and May, but the rebound had so far been slower than thought, and the rapid growth in production has been weighing on steel prices.
‘The previous rise in steel prices has lured steel mills to unleash capacity, and it seems there are no immediate signs that mills will cut production soon,’ said a researcher with a large-sized state-owned steel mill in northeastern China.
Benchmark rebar steel futures on the Shanghai Futures Exchange fell for a third straight week last week. Construction-used rebar was off 3 yuan at 4,218 yuan ($670) a tonne by the midday break on Tuesday.
China’s daily crude steel run also reached a fresh record on a 10-day period, hitting 2.035 million tonnes between April 21-30, versus the previous record of 2.031 million tonnes achieved in the first 10 days of April, data from the China Iron and Steel Association (CISA) showed.
CISA estimates the country’s overall data based on its major members – consisting of around 80 medium- and large-sized steel mills, which produce around 80 percent of the total.
Several steel mills are producing on the brink of making losses amid weak demand and high raw material cost, said the researcher from the Chinese mill.
‘Orders remain relatively weak, and the fall in iron ore prices is just symbolic,’ he said.
At around $144 a tonne currently, benchmark 62-percent grade iron ore has fallen nearly 4 percent since hitting a six-month high in mid-April.
The following table shows changes in daily output since the beginning of the year based on data from CISA. (AGENCIES)
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