* November output climbs 5 pct from year before
* But down over 3 pct from October
* Production in first 11 months edges up
(Adding comment and background throughout)
By Muyu Xu and Manolo Serapio Jr
BEIJING, Dec 13 China's steel mills boosted
their monthly output at the fastest pace in more than two years
in November, data showed, as robust infrastructure demand
spurred producers to expand production for a ninth straight
month even as coking coal prices bite.
Output rose 5 percent to 66.29 million tonnes year-on-year,
the fastest growth since June 2014, according to data from the
National Bureau of Statistics on Tuesday.
Although soaring costs of key raw materials, like coking
coal and iron ore, have eroded margins, steel mills were still
making a profit of between 200-600 yuan ($28.98-86.95) per
tonne, said Wang Yilin, senior steel analyst at Sinosteel
"Steel mills want to increase production because of the big
profit margins," she said. "The steel market has also been
driven by strong infrastructure demand, as Beijing has approved
more projects this year."
The spike last month showed mills in the world's top
producer were chasing rising prices, said Richard Lu, analyst at
CRU consultancy in Beijing. Shanghai rebar futures have
surged 95 percent this year.
Strong demand and rising prices of raw materials have
enabled steel mills to increase their prices and pass on the
cost to end-users, said Lu.
"Because of the strong market sentiment, physical traders
are buying steel in hopes of making money with the price
continuing to increase," he added.
Compared with October, output dropped 3.24 percent to its
lowest level since February ahead of a seasonally slowest period
for steel sales from the infrastructure and construction sectors
during the colder winter months.
Analysts expect output to decline in December as mills
undertake annual scheduled maintenance.
Total output for the first 11 months of 2016 edged up 1.1
percent to 738.94 million tonnes.
In 2015, China's output dropped for the first time since
1981 as weak metal prices and a government clampdown on excess
capacity forced plants to shut or suspend operations.
This year, most of the capacity that has been closed for
good was already shuttered.
"Some of them have been idle for years, so it won't largely
impact steel output," said Lu.
($1 = 6.9005 Chinese yuan renminbi)
(Writing by Josephine Mason; Editing by Richard Pullin)