July 22, 2014 / 3:45 PM / 3 years ago

Global steel output near record in June on better economic outlook

* Global crude steel output rose 3.1 percent in June

* China output near record levels, CIS growth strong

* Output growth roughly in line with growth in demand

By Maytaal Angel

LONDON, July 22 (Reuters) - Global crude steel production rose 3.1 percent in June from a year ago, remaining near record levels as producers crank up output in response to an improving economic outlook, data from the World Steel Association showed.

Crude steel output hit 137 million tonnes in June, nearing the record seen in March, driven by a 4.5 percent year-on-year growth in China to 69.3 million tonnes.

China produces around half the world’s steel, but output growth remained strong at 3.6 percent in North America and at 1.8 percent in the CIS (Commonwealth of Independent States) - the third and fourth-largest producing regions after Asia.

“What is encouraging is that from a global perspective output in the world outside China has been rising since September 2013 ... and global growth in the first half is not all that out of line with growth in global demand,” said VTB’s head of Commodities Research Wiktor Bielski.

“Overall I expect similar numbers in the second half in terms of production, consumption and prices. EU prices will hopefully pick up in Q4, same thing in China, and U.S. prices will stay strong.”

Global growth has stabilised this year, with debate in the United States turning to the timing of rate hikes, but the European Central Bank introducing negative interest rates to speed up the euro zone recovery.

In China, there is increased optimism the economy has turned the corner after recent policy stimulus aimed at countering concerns over a property market slowdown.

Still, steel prices in Asia ST-CRUAS-IDX and Europe ST-CRUEU-IDX are at around 4-1/2 year lows, partly thanks to falling raw material costs like iron ore, but also oversupply built up since the 2008 financial crisis.

However, in the North America, prices ST-CRUNAM-IDX are near two-year highs, helped by firm U.S. economic growth and a more measured 0.9 percent rise in steel output in the first half, the World Steel Association data showed.

June steel output grew at 6.1 percent in the construction-heavy Middle East, the strongest global growth rate, while South American output fell 6.5 percent, the weakest global rate.

Reporting by Maytaal Angel, editing by David Evans

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