China's steel production up despite govt's winter curbs

Beijing

CHINA'S daily steel output rose in January and February as mills in the world's top producer raced to take advantage of high prices, even as worries mount about a growing surplus and slowing demand from the construction sector.

The strong output data on Wednesday helped push prices lower in Shanghai, with rebar construction steel futures hitting their lowest in almost four months, extending their longest losing streak since last summer.

The production rise came despite Beijing's stringent crackdown on heavy manufacturing in 28 of its smoggiest cities as part of its war on winter smog. Those curbs will be lifted in most regions on Thursday, which marks the end of the four-month winter heating seaon.

The data is likely to draw international scrutiny after US President Donald Trump this month slapped hefty import duties on steel, aimed at curbing Chinese shipments.

Global producers have for years accused China of exporting its excess metal at bargain prices after huge capacity expansions.

Chinese mills produced 136.82 million tonnes of crude steel in January and February, up 5.9 per cent from a year earlier, data from the National Bureau of Statistics (NBS) showed.

The NBS only provided combined output figures for January and February due to the distortive effects of the Chinese New Year holiday that sees much of China shut down for a week.

Daily output was 2.32 million tonnes, up 7.4 per cent from December and up more than 5 per cent on the same two months last year, according to Reuters calculations.

It was the highest daily rate since October, before the winter heating season started in November when strict output curbs came into force, and the fastest pace for the first two months of the year on Reuters' records going back to 2015.

China's push to close older, polluting steel mills drove up local steel prices, encouraging other producers to boost output in anticipation of a seasonal pickup in demand after the holiday period, despite Beijing's output curbs, analysts said. REUTERS