Shanghai - China’s steel output rebounded in August as prices rallied, delivering an early warning to world leaders who earlier this month pledged to tackle the global glut of the metal.
Production of crude steel in the world’s biggest supplier rose to 68.57 million metric tons in August, up 3 percent from a year earlier and 2.6 percent higher than in July, according to the country’s National Statistics Bureau on Tuesday. For the first eight months, output of 536.32 million tons was just 0.1 percent shy of last year’s pace.
The bounce in August’s output from a sharp decline in July follows the Group of 20 leaders meeting in China, which wrapped up on September 5 with a plan to to establish a global forum to deal with oversupply. Chinese mills, which make about half the world’s steel, boosted output amid resurgent prices, with steel reinforcement bar on the Shanghai Futures Exchange rising to its highest monthly average since December 2014.
A pick-up in Chinese steel prices this year has helped ease crisis conditions in the global industry, although exports from the Asian nation remain at elevated levels, spurring trade tensions. China has said it will tackle its own steel overcapacity by cutting as much as 150 million tons, or about 13 percent of its total, by 2020.
Beijing’s credit-and-infrastructure splurge that began earlier this year will continue to support demand and higher steel output into the first half of 2017, Macquarie Group’s Singapore-based analyst Ian Roper said in an interview earlier this month.
BLOOMBERG