China’s daily crude steel output rebounds in late February

China’s daily crude steel output rebounded in late February, raising concerns of oversupply as demand remains weak.

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The country produced 2.0817 million tpd of crude steel during the last eight days of February, up 5.86% from the second ten days of the month, according to estimates released by the China Iron & Steel Assn (Cisa) on Monday March 10.

Output of Cisa member mills, which are mainly medium-sized and large steelmakers, averaged 1.804 million tpd in late February, up 6.82% from the preceding period.

The rebound was beyond market expectations, as domestic steel demand has not seen any obvious improvement so far, with prices edging lower in late February, sources said.

Eastern Chinese rebar prices were at 3,180-3,230 yuan ($519-527) per tonne including VAT on February 28, down 60-80 yuan ($10-13) per tonne from February 20 levels. Seaborne iron ore prices also fell by $6 per tonne over the same period, according to Steel First’s price archive.

“The larger output will likely weigh on the market further, given the already bearish sentiment spreading over the industry,” a Beijing-based analyst said.

As at February 28, the combined finished steel inventory at Cisa member mills totalled 16.2533 million tonnes, down 5.9% from February 20 levels, but up 39.4% from the beginning of this year, according to the association’s figures.