August 12, 2015 / 6:18 AM / 2 years ago

UPDATE 1-China July steel output falls 4.6 pct on yr -stats bureau

* Average daily steel output lowest since November 2014

* Jan-July output falls 1.8 pct to 476.04 mln T

* Steel mills may pick up production ahead of curbs in Beijing (Adds background)

SHANGHAI, Aug 12 (Reuters) - Chinese crude steel output fell 4.6 percent to 65.84 million tonnes in July from a year ago, government data showed on Wednesday, as steel mills in the world's top producer faced tumbling prices and faltering demand.

Average daily output stood at 2.124 million tonnes, down 7.6 percent from June, its lowest since November 2014, according to Reuters calculations based on data from the National Bureau of Statistics (NBS).

Softer demand caused by slowing Chinese economic growth has pushed steel prices down 26 percent so far this year, plunging many mills into the red and forcing them to cut output or ship more to overseas markets.

Growth in China's factory output, fixed-asset investment and retail sales were all weaker than expected in July, adding pressure on Beijing to roll out more measures to support the struggling economy.

Total output for the first seven months of 2015 dropped 1.8 percent to 476.04 million tonnes from the same period last year, NBS data showed.

But Beijing will shut factories to ensure clean air from Aug. 20 to Sept. 3 during events to mark the 70th anniversary of the end of World War Two. The measures may extend to neighbouring regions and could lead to a pick-up in production beforehand.

Chinese large and medium-sized steel mills suffered aggregate losses of 21.68 billion yuan ($3.43 billion) from their core steel businesses in the first half of this year.

According to a survey published on July 28 by the Hebei Province Metallurgical Industry Association, a majority of steel processing plants in the key producing province of Hebei have either shut down or halved output due to weak prices and environmental pressures.

A total of 30 steel firms out of 81 in the province made losses in June, 14 more than in May, it said.

Exports of steel products jumped to 9.73 million tonnes in July, up 21 percent from a year before and near the record high of 10.29 million tonnes posted in January, earlier data showed. (Reporting by Ruby Lian and David Stanway; Editing by Joseph Radford)

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