China's crude steel output hit a record high in February on talk of higher demand, but signs of economic weakness raised doubts about the market outlook.
Steel output rose 9.8 percent from a year earlier to 2.21 million tons a day last month, data from the National Bureau of Statistics showed yesterday.
That's above January's daily average of 2.05 million tons, the previous record.
Steel demand typically picks up in China at the start of the year, and steel mills making flat products, in particular, have boosted production, www.cnchemicals.com analyst Hu Yanping said.
Flat products are used to make automobiles, containers and home appliances.
Hu also said steel firms have hiked output by using cheap iron ore stocks though ore prices have risen in the first two months.
But China's recent economic data have pointed to slowing growth in manufacturing activity and industrial production. Also, the government's new measures to curb the property sector this month could weigh on construction steel.
Singapore bank DBS expects consumer-related flat steel demand to rise 6.4 percent this year, outpacing the 1.3 percent gain for construction steel. Still, Hu expects production in the peak month of March to remain high.