(Adds detail, background, analyst comment)
By Maytaal Angel
LONDON May 21 Global crude steel output rose at
its second-fastest level this year in April, responding to an
uptick in demand in Europe and the Middle East, though higher
output in China added to oversupply and kept prices depressed.
Output of the alloy rose by an annual 1.7 percent globally
in the month to 137 million tonnes, with production in China
rising 2.1 percent to 68.8 million tonnes, data from steel
producers association Worldsteel showed.
China is the world's top producer and consumer of steel.
"Steel prices are near the lowest they've been in recent
times," said Jeremy Platts, analyst at steel consultancy MEPS.
"There are some encouraging signs that demand is increasing
and output growth isn't just coming from China, as in recent
years, but at the same time the price would benefit from some
production cuts in Europe," Platts added.
In percentage terms, the biggest growth in output came from
the Middle East - up an annual 9.6 percent - and from Europe,
where it rose an annual 4 percent to 14.61 million tonnes as
economic growth in the region takes hold.
Industry lobby Eurofer has said it expects EU demand for
steel to grow almost 3.5 percent this year, the first growth in
two years, while top steelmakers such as ArcelorMittal SA
and Tata Steel Ltd recently boasted upbeat
earnings thanks in large part to Europe and the United States.
Still, global steel prices ST-CRU-IDX have not much
recovered from the 3-1/2 year lows they plunged to last June,
thanks in large part to a structural oversupply and to falling
raw material prices such as iron ore.
Iron ore prices .IO62-CNI=SI are down some 25 percent this
year, hitting 2-1/2 year lows earlier this week on slowing
growth in China. Economists say Beijing may need more stimulus
measures to achieve its 7.5 percent growth target this year.
Worldsteel said output in Ukraine fell 4.5 percent in April,
while in nearby Russia production rose just 0.7 percent, as the
threat of more Western sanctions against Moscow for its actions
in Ukraine continued to hurt the country's economy.
In Japan, the world's second-largest steel producer, output
fell 2.5 percent to 8.9 million tonnes, though output in the
year through April was still up 2 percent at 36.5 million
tonnes, Worldsteel said.
(Editing by David Holmes)