LONDON, Dec 20 (Reuters) - Global crude steel output rose 3.7 percent in November, industry data showed on Wednesday, but China’s aggressive campaign to clean its skies by clamping down on polluting steel mills is expected to bite.
Crude steel output for the 66 countries reporting to the World Steel Association (Worldsteel) hit 136.3 million tonnes in November versus 131.5 million tonnes in the same month last year, Worldsteel said in a statement.
November crude steel output in China, which produces half the world’s steel, rose 2.2 percent on the year to 66.2 million tonnes. However, China’s daily crude steel output slid in November to a nine-month low, according to Beijing data.
“The cuts are real,” said Jeremy Platt, an analyst at steel consultancy MEPS.
“The December number is going to be more interesting. Some of those cuts were being phased-in in November, so perhaps their full magnitude is not (apparent) in the November data,” he added.
China ordered steel mills and coke plants in 28 cities to cut production between Nov. 15 and March 15 to help clear the country’s smoggy skies.
The move has reduced steel supply at a time when demand from southern regions was firm, helping lift steel prices by nearly 10 percent last month. They are up some 50 percent so far this year.
Data from Worldsteel also showed global capacity utilisation rates at mills rose to 70.7 percent in November versus 69.2 percent in November last year, helped by steelmaking capacity cuts in China.
China says it has cut 110 million tonnes of legal capacity and 120 million tonnes of illegal capacity since the start of last year. This, coupled with strong demand has helped steel prices and capacity utilisation rates recover around the world.
Next year, however, Worldsteel expects no growth in steel demand in China as Beijing infrastructure spending fades and the country resumes efforts to rebalance the economy and protect the environment.
The steel industry, worth about $900 billion a year, is seen as a gauge of the world’s economic health.
Reporting by Maytaal Angel, editing by Louise Heavens