LONDON, April 24 Global steel output surged 5.7
percent in the first quarter, industry data showed on Monday,
adding to worries about over-supply even though China is
pressing on with plans to cut excess capacity.
Beijing, which has pledged to cut 100-150 million tonnes of
excess steel capacity by 2020, on Monday revoked the licenses of
29 steel firms, just days after the U.S. said it would open a
probe into cheap steel exports from China and elsewhere.
Global crude steel output totalled 410.5 million tonnes in
the first quarter versus 388.3 million tonnes in the same period
last year, according to the World Steel Association
Output in China, which accounts for half of global steel
production, rose 4.6 percent in the quarter to 201.1 million
tonnes, said Worldsteel, whose members jointly account for 85
percent of global steel production.
The production increase partly reflects attempts by steel
mills to take advantage of soaring prices, but rising inventory
levels in China and recent price falls suggest output is now
growing faster than demand.
"Prices appear to have peaked, the fact that production is
going up now is maybe not a good sign for prices," said Jeremy
Platt, analyst at UK-based consultancy MEPS. "Production is
rising from a low baseline (last year) but overall demand isn't
expected to grow massively this year."
"We're definitely not returning to the deep dark days of the
crisis, but we expect a softening in prices in the second
quarter and then into the second half."
Worldsteel on Friday raised its forecast for global steel
demand growth to 1.3 percent in 2017 from 0.5 percent
previously, but the estimates in no way match the growth seen so
far this year in supply.
The steel industry, worth about $900 billion a year, is seen
as a gauge of the world's economic health.
(Reporting by Maytaal Angel. Editing by Jane Merriman)