China’s steel output rose 5.7 percent in June to a record 73.23 million tonnes, data showed on Monday, as mills in the world’s top producer ramp up production due to fat profits from rallying prices.
The numbers come amid a trade dispute with the United States, which says China has flooded international markets with cheap aluminum and steel.
June’s total surpassed April’s monthly record of 72.78 million tonnes, fuelling worries of a growing glut.
In the first half of this year, steel output totaled 419.75 million tonnes, up 4.6 percent from the same period in 2016, data from the National Statistics Bureau showed.
Meanwhile, China’s aluminum production rose 7.4 percent year-on-year in June to its highest level on records back to 2014.
Steel rebar margins were almost 1,000 yuan ($147.77) per tonne in June, enticing mills to increase output, said Bai Jing, analyst at Galaxy Futures.
“China’s crackdown on low-end steel has left a capacity gap in the market,” she said.
Stocks of rebar held by Chinese traders hit a six-month low on Friday, at 370.4 million tonnes, data from SteelHome consultants showed.
China eliminated around 120 million tonnes of low-end steel capacity in the first six months of this year.
The country had fulfilled nearly 85 percent, or 42.4 million tonnes, of its 2016 steel capacity cutting target by May.
Source: Reuters
