A labourer looks at steel coils next to a production line of Dongbei Special Steel Group Co., Ltd., in Dalian, Liaoning province – Reuters

 China’s June daily steel output at new high

BEIJING (Reuters): China’s daily crude steel output rose 1.8% in June to hit a record 2.31 million tons, defying any seasonal downturn in demand, data from the statistics bureau showed last week.
Total output over the month reached 69.3 million tons, up 4.5% from the same month last year but dipping 1.6% from May’s record high.
On an annualised basis, output amounted to 828.6 million tons, according to Reuters calculations, which would represent a 6.3 increase on last year.
Despite soaring environmental costs, persistent overcapacity and widespread cash shortages throughout the Chinese steel sector, output has remained strong, with little indication that mills are adjusting production rates in anticipation of a summer slowdown in demand over summer.
“The rise in new export orders together with an improvement in demand have dragged production up,” analysts at the Tangshan-based consultancy ChinaTSI.com said in a note.
However, the consultancy warned that there were no obvious signs that the increase in steel demand was being reflected by price increases, and more policy support would be needed to keep the momentum going over the next few months.
Steel product inventories fell over the course of June, according to the SteelHome consultancy, with rebar stocks dropping more than 11% to end the month at 5.98 million tons. Rebar stocks had surged to as high as 9.4 million tons in February.
With domestic demand still relatively weak, the sector has benefited from an improvement in exports. In the first half of the year, China sold 41 million tons of steel products overseas, up 33.6% compared to the same period of 2013.
The China Iron and Steel Association (CISA) warned in a research report earlier this month that apparent steel consumption in China was rising far more slowly than production, and by May had actually declined for four consecutive months.
It said 97.2% of additional output over the first five months of the year was diverted into exports.