LONDON, June 20 Global crude steel production rose at an annual 2.2 percent rate in May as output in China hit new record levels and North American and European mills cranked up production, industry data showed, pressuring prices the world over.
Global crude steel output hit 141 million tonnes in May, nearing the record seen in March. The increase was driven by an annual 2.6 percent growth in China's output to 70.4 million tonnes, data from the World Steel Association showed.
Global steel prices ST-CRU-IDX are at their lowest levels since August last year and not far off the 3-1/2 year lows reached last June. The price falls have come despite an increase in demand in western economies.
"Growth in steel output is exceeding growth in demand and is adding to the global surplus," said MEPS analyst Jeremy Platts.
"Steel prices are going to fall on a year-on-year basis. Raw material costs like iron ore are coming down, but that's not the whole story; the excess supply is a pressure. China's exports are soaring," he added.
According to China's General Administration of Customs, Chinese exports of steel, including stainless, hit 8.07 mln tonnes in May, the highest ever level and an annual increase of 41.5 percent in the year to date.
The pressure on steelmakers' margins is being mitigated, however, by a 32 percent fall in iron ore prices .IO62-CNI=SIn this year, outpacing the fall in steel prices.
Output in Europe, the second-largest steel-producing region after China, grew by 2.7 percent to 15.04 million tonnes, while output in North America grew 3.3 percent to 10.22 million tonnes, the World Steel Association data showed.
The fast industrialising Middle East showed the highest growth rate in May, rising 7.3 percent to 2.4 million tonnes, the data showed. (Reporting by Maytaal Angel; editing by Jane Baird)