China’s crude steel production increased by 13.9pc in January-May to 473.1mn mt compared to the same period last year according to the National Bureau of Statistics (NBS).
Steel production growth has however slowed compared with the 15.6pc gain reported by NBS for the January-April period. Finished steel production reached 124.7mn mt during the same timeframe.
The country’s crude steel output hit a monthly record of 99.45mn mt in May up 1.6pc from 97.85mn mt in April and 6.6pc compared to May 2020, following gradually improving downstream demand and firm profit margins of large steelmakers. However, China’s daily output in May dropped by 1.5pc from a month earlier to 3.21mn mt NBS data indicated.
In late May, the Chinese government intervened and raised concerns over high prices and tame abnormal fluctuations in commodities prices. As a result, there was a steep drop in margins towards the end of May. Still, prices rebounded in early June on recovering demand.
Record high steel prices and the huge gap between international levels against Chinese prices, push Chinese mills to continue to produce at full capacities despite production curbs.