June 11 (Bloomberg) -- China’s daily steel production in May fell from the previous month and may decline further in June as mills cut output because of waning demand and prices.
The daily output was 1.98 million metric tons last month, compared with 2.02 million tons in April, based on monthly data collated by the National Bureau of Statistics. Crude-steel output was 61.23 million metric tons in May, the bureau said today in an e-mail, and 60.57 million tons in April.
Steel prices in China, the world’s biggest producer and consumer of the alloy, have fallen for eight straight weeks because of waning demand from builders and automakers. Daily production may drop to between 1.9 million tons and 1.95 million tons this month, said Hu Yanping, chief analyst with researcher Custeel.com in Beijing.
“Some mills have actually brought down production slightly amid falling prices, as the May figures imply daily output was lower than April levels,” Hu said. “Steel output may fall further in June as mills are barely profitable at current prices.”
Prices of hot-rolled coils, a benchmark product, have fallen by an aggregate 5.1 percent to 4,170 yuan as of June 8, according to researcher Beijing Antaike Information Development Co.
Production gained 2.5 percent in May from a year earlier, the bureau said. For the first five months of this year, steel output climbed 2.2 percent to 296.3 million tons from a year earlier, the bureau said.
Iron ore, a steelmaking ingredient, has rebounded 1.2 percent from a record low on May 23 after China approved an estimated $23 billion of steel projects, fueling speculation the revived focus to sustain economic growth would boost raw material consumption.
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