||China's crude steel production hits new record
Global crude steel production rose at an annual 2.2 percent rate in May as output in China hit new record levels and North American and European mills cranked up production, industry data showed, pressuring prices the world over.
Global crude steel output hit 141 million tons in May, nearing the record seen in March. The increase was driven by an annual 2.6 percent growth in China's output to 70.4 million tons, data from the World Steel Association showed over the weekend.
Global steel prices are at their lowest levels since August and not far off the lowest in three and a half years reached last June. The price falls have come despite an increase in demand in Western economies.
"Growth in steel output is exceeding growth in demand and is adding to the global surplus," said MEPS analyst Jeremy Platts.
"Steel prices are going to fall on a year-on-year basis. Raw material costs like iron ore are coming down, but that's not the whole story; the excess supply is a pressure. China's exports are soaring," he noted.
According to China's General Administration of Customs, Chinese exports of steel, including stainless, hit 8.07 million tons in May, the highest ever level and an annual increase of 41.5 percent in the year to date.
However, steel production in North China's Hebei Province fell 3 percent in May from a year ago, compared to a 2.6 percent increase nationwide, with the top steel-making province bearing the brunt of a campaign to shut down polluting industrial capacity.
Hebei was home to seven of China's 10 smoggiest cities in 2013, according to official air quality data, and has been under heavy pressure to clean up its economy and ease its dependence on polluting industries like steel and cement.
Hebei produced 16.36 million tons of steel in May, up 1.1 percent compared to April, but its share of the total fell to 23.2 percent from 23.5 percent in the previous month, according to data from the National Bureau of Statistics.
Over the first five months of the year, Hebei produced 82.95 million tons of steel, 24.2 percent of the total of 2013.
The pressure on steel makers' margins is being mitigated, however, by a 32 percent fall in iron ore prices this year, outpacing the fall in steel prices.
Output in Europe, the second-largest steel-producing region after China, grew by 2.7 percent to 15.04 million tons, while output in North America grew 3.3 percent to 10.22 million tons, the World Steel Association data showed.
The fast industrializing Middle East rose 7.3 percent to 2.4 million tons, the data showed.