BEIJING, May 16 (Reuters) - China's crude steel output picked up
in April, rising 5.1% from a month earlier as the impact of environmental
restrictions and COVID-19 disruptions eased, but it was still well below
year-ago levels.
The
world's biggest steel producer made 92.78 million tonnes of the metal last
month, data from the National Bureau of Statistics (NBS) showed on Monday, up
from 88.3 million tonnes in March and down 5.2% from April 2021.
Average
daily output in April was 3.09 million tonnes, according to Reuters analysis of
the NBS data. That compared with 2.85 million tonnes of daily production in
March.
The
rising output came after mills in northern China finished production cuts the
government ordered in mid-March, while a raw material supply crunch due to transport
restrictions also gradually eased.
However,
China is battling its worst phase of the coronavirus pandemic since the virus
emerged in late 2019 and is sticking to a strict "dynamic zero-COVID"
policy, which has crippled factory activity and downstream consumption.
China's
factory activity contracted at its fastest in 26 months last month, surveys
showed, with construction activity also slumping in March, suggesting steel
producers might have missed the traditional peak demand of the year.
Resilient
prices for raw materials such as iron ore and coking coal further squeezed
companies' profits, with steelmaker Baoshan Iron & Steel flagging a 30%
drop in its first-quarter net income and lowering prices for June.
"Some
steel mills, especially those with electric blast furnaces, have suffered
losses due to weak demand and high raw material prices," said Zhuo Guiqiu,
analyst with Jinrui Capital, adding that the manufacturing and construction
sectors were sluggish in the north and east.
Zhuo
expected consumption to gradually pick up in May but said it would still be
hard to match the levels of last year.
In
the first four months, China made 336.15 million tonnes of the metal, down
10.3% from same period a year ago, the statistics bureau said.
China
has pledged to continue to cut its steel output this year, vowing an annual
decline. (Reporting by Min Zhang and Dominique Patton; Editing by Muralikumar
Anantharaman, Robert Birsel)