Apparent steel consumption reached 243.42 million tonnes during the first three months, officials from the China Iron and Steel Association (CISA) said in a quarterly briefing, as the world's No. 2 economy lifted tough COVID curbs that had hampered construction activity.
"The demand is better than we had expected; previously we thought it would be flat on year but it posted some growth in the end," said Wang Yingsheng, CISA chief economist. But the growth was overshadowed by a surge in production that drove down prices.
Steel output rose 6.1% versus a year ago to 261.56 million tonnes, according to government data released earlier this month, after mills ramped up production in anticipation of much more robust demand.
Rebar on the Shanghai Futures Exchange has dropped nearly 10% since late March to 3,719 yuan ($537.34) a tonne on Wednesday. "The main problem comes from the supply side," said Wang, adding that traders and end-users tend to take a watchful stance in the face of a weakening market, exacerbating falling prices. Steel inventories at mills also recorded year-on-year growth, CISA said, without giving details. The government-backed association on Monday urged domestic steelmakers to cut production to ensure stable cash flow. ($1 = 6.9211 Chinese yuan) (Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Bernadette Baum)
