BUSINESS NEWS | Mon May 15, 2017 | 1:05am EDT
China April steel output hits record, second month to push peak higher: stats bureau
Rolls of steel are stacked inside the China Steel Corporation factory, in Kaohsiung, southern Taiwan August 26, 2016. REUTERS/Tyrone Siu/File Photo
Rolls of steel are stacked inside the China Steel Corporation factory, in Kaohsiung, southern Taiwan August 26, 2016. REUTERS/Tyrone Siu/File Photo
China produced a record volume of steel in April, breaking the previous highest peak set in March, data showed, stoking worries about a growing glut of metal even as the government said most of this year's targeted capacity cuts have already been met.
Chinese steelmakers churned out a highest-ever 72.78 million tonnes in April, up 4.9 percent, the National Statistics Bureau (NBS) data showed on Monday, surpassing March's monthly record of 72 million tonnes as mills in the world's top producer rushed to profit from rising prices even as demand remains flat.
In a briefing after the data release, an NBS spokesman said the nation had already met 63.4 percent of this year's targeted cuts for steel and 46 percent of coal cuts.
The ramp-up in steel output underscores the challenge for the government as it aims to slash 50 million tonnes of low-grade outdated capacity this year, on top of the 65 million removed last year. The government is targeting rebar, used in construction, in particular.
But many of the plants that have been closed in recent years were already idled and output from still-open plants has continued to rise.
"Driven by high profits, steel companies are raising their capacity, by using high-quality iron ore and increasing their use of steel scrap," said Bai Jing, analyst at Galaxy Futures.
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"Production might be at record high, but the steel production capacity is being reduced."
In the first four months, production totaled 273.9 million tonnes, up 4.6 percent from the same period a year earlier, the data showed.
(Reporting by Josephine Mason; Additional reporting by Hallie Gu; Editing by Richard Pullin and Tom Hogue)