China Steel Output Hits Record High Amid Doubters

by tubelinks on 04/24/2012 - 04:11 pm

Tag: Press Release

China’s daily crude steel output surged to a record of above 2 million tonnes in early April, sustaining last month’s rapid pace, although an industry group warned of a slow down in momentum due to moderating demand. A recent pickup in steel prices in China amid a seasonal recovery in demand spurred steelmakers in the world’s biggest producer and consumer to boost output.

But analysts are wary about the strength of the recovery in demand, with steel prices struggling to rise amid signs that the overall economy is slowing down. China’s economy grew at its weakest pace in nearly three years in the first quarter.

China’s crude steel production reached 2.031 million tonnes a day on average in the first 10 days of April, data from the China Iron and Steel Association (CISA) showed on Wednesday. That topped the previous record of 2.018 million tonnes per day in the last 10 days of June last year.

The latest output estimate from CISA follows government data last week showing China produced a record high of 61.58 million tonnes of crude steel in March.

CISA said current high production levels are not sustainable.

While inventories of five major steel products including rebar, wire rod and hot-rolled coil held by traders in 26 big Chinese cities fell nearly 6 percent to 17.89 million tonnes at the end of March from a month ago, the levels remain high, the industry group said.

Investment bank Macquarie estimated earlier this month that steel inventories at Chinese traders have dropped 6 percent since peaking six weeks ago. But over 2007 to 2011, inventories fell an average of 14 percent six weeks after the first-quarter peak, Macquarie said.