China's average daily crude steel output rebounded to above 1.9 million tonnes in the first 10 days of October, as rising steel prices prompted mills to lift production even as the demand outlook for the rest of the year remains weak.
Average daily crude steel output in the world's top steel producer rose to 1.916 million tonnes between October 1-10, up 4 percent from September 21-30, data from the China Iron & Steel Association showed on Wednesday.
Average daily steel production had been below 1.9 million tonnes from mid-August, with the slowing economy in China hitting demand and pushing steel mills to curb output. The latest round of gains in steel prices has encouraged steel mills to ramp up production, also lifting demand for key ingredient iron ore. "Steel has rebounded by 300-400 yuan ($48-64) per tonne between mid-September and early October, so mills have restored profits and some have resumed production," said Qiu Yuecheng, an analyst with Xiben New Line Co Ltd, a spot steel products trading platform in Shanghai.
Chinese steel prices have climbed more than 10 percent from a three-year low hit in early September, with demand picking up due to a seasonal increase in construction activity. But a lack of factors that could boost demand longer term and the rapid rise in output are expected to curb price gains.
BHP Billiton , the world's biggest miner, has joined rivals Rio Tinto and Fortescue Metals Group in pressing on with plans to boost iron ore output, though scaling back expansions and spending.