LONDON, April 24 (Reuters) - 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 (Worldsteel).
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