China’s steel mills have clicked into a higher gear, with production rising from a year earlier, defying international calls for cuts in supply that has been flooding world markets.
Crude-steel output totaled 603.78 million metric tons in the first nine months, up 0.4 percent from a year ago, according to data from the statistics bureau on Wednesday. Supply was 68.17 million tons last month from 68.57 million in August, and was up 3.9 percent from a year earlier, the data showed.
After the nation’s mills churned out less steel on year in 2015 for the first time in more than three decades, predictions were widespread that output would post a significant drop this year. There were also global calls for cuts as the deluge hurt producers from India to the U.S. Instead, the country that supplies half the world’s steel has fired up plants as policy makers added stimulus, boosting demand, and a price rebound restored profitability.
“Investment in real estate and infrastructure sectors has been much better than we expected,” Daniel Hynes, senior commodities strategist at Australia & New Zealand Banking Group Ltd., said by e-mail. The bank’s predicting that Chinese production will rise 3 percent this year, reversing a forecast made at the start of 2016 for a 5 percent drop.
Steel output will probably stay high as consumption typically rises in October, the China Iron & Steel Association said in a note on its website last week. As winter approaches and the country steps up efforts to cut overcapacity in its steel sector, production will probably fall over time, the group said.
Source:Bloomberg