Tuesday, 01 Feb 2011
Reuters quoted data from the China Iron & Steel Association showed that China daily crude steel output fell 5.4% to 1.695 million tonnes in the second 10 days of January from the previous 10 days the first fall since mid-October.
Average daily steel production on a 10 day basis has climbed since the middle 10 days of October, despite government led measures to cut production in order to meet energy efficiency targets.
Analysts suggested that slower production was mainly the result of routine annual overhauls by several steel mills.
Mr Feng Gangyong an analyst with Guangfa Securities said "Several steel mills carried overhauls which usually last 7 to 10 days before the Chinese Lunar New Year and this had some impact on production."
He said that "I expect this fall would be temporary and steel production will recover growth after the Spring Festival and likely peak in the second quarter."
Mr Feng forecast that China steel production will likely hit 675 million tonnes this year as demand from downstream users including housing and machinery sectors remain strong.
China steel output hit a record of 627 million tonnes last year while analysts are expecting the world top steel producer will continue lifting production this year.(sourced:Reuters)
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