China’s daily crude steel output rose 1.8% in June to hit a record 2.31 million tonnes, defying any seasonal downturn in demand.
Data from the statistics bureau showed that total output over the month reached 69.3 million tonnes up 4.5% from the same month last year but dipping 1.6% from May’s record high.
According to Reuters calculations, on an annualised basis, output amounted to 828.6 million tonnes which would represent a 6.3 increase on last year.
Despite soaring environmental costs, persistent overcapacity and widespread cash shortages throughout the Chinese steel sector, output has remained strong, with little indication that mills are adjusting production rates in anticipation of a summer slowdown in demand over summer.
Analysts at the Tangshan based consultancy ChinaTSI said that the rise in new export orders together with an improvement in demand have dragged production up.
However, the consultancy warned that there were no obvious signs that the increase in steel demand was being reflected by price increases and more policy support would be needed to keep the momentum going over the next few months.
According to the SteelHome consultancy, steel product inventories fell over the course of June with rebar stocks dropping more than 11% to end the month at 5.98 million tonnes.
Source – Reuters