World's biggest steelmaker pushes output to record after rally

[BEIJING] China, the world's biggest steel producer, pushed output to a record in March as mills fired up idle plants to take advantage of a big price surge since the start of this year.

Output of steel used in everything from car bodies to skyscrapers jumped to 70.65 million metric tons, up 2.9 per cent from a year earlier, the National Bureau of Statistics said Friday. That's the highest ever, according to monthly data supplied by Beijing Antaike Information Development Co, a state-owned researcher.

Production for the first quarter was still lower, falling 3.2 per cent to 192 million tons from a year earlier. Last year saw the first annual decline in China's output since 1981.

The country's steel mills are ramping up output after cuts at the end of 2015 fueled a major rally that has rippled out to world markets and helped lift iron ore prices by 36 per cent this year.

The steel rally will end soon as Chinese mills lift output and traders end a flurry of restocking, HSBC Holdings Plc analysts said in a note Thursday.

Rising output in March will be a concern to a beleaguered global steel industry grappling with the consequences of China's metals demand slowing for the first time in a generation.

China exported a record amount of steel last year, triggering trade suits, battering profits at world producers and forcing India's Tata Steel Ltd to offload its ailing UK business. Export volumes in March reached 9.98 million tons, up 30 per cent on the year.

China's aluminum industry, also the world's biggest and facing similar issues of structural overcapacity, followed a similar dynamic to steel in the first quarter.

Production of primary aluminum used in everything from beer cans to airplanes rose 2.7 per cent to 2.62 million tons in March from a year earlier, while output for the three months was 2 per cent lower at 7.34 million tons.

BLOOMBERG