* March daily steel output hits highest since September
* Mills rushed to ramp up output as heating season ended -analyst
* Data will stir worries about glut (Adds detail, comment)
BEIJING, April 17 (Reuters) - China’s steel producers ramped up output in March to the highest level since September, with mills in the world’s top market for the metal rushing to boost operations after winter restrictions to prevent smog were lifted in the middle of the month.
China last month churned out a total of 73.98 million tonnes of steel, up 4.5 percent from same period in 2017, data from the National Bureau of Statistics showed on Tuesday.
Average daily steel output in March reached 2.39 million tonnes, the highest level since September and up 2.8 percent from combined January-February data and also year-on-year, according to Reuters records.
The data will stir worries about mounting oversupply as inventories of rebar used in construction SH-TOT-RBARINV hit their highest in years, dragging steel prices to their worst monthly performance since May, 2016.
Some analysts were surprised by the rise given that winter curbs as part of Beijing’s war on smog were in place until the middle of the month.
But they said the data illustrates the fast pace at which mills were ready to unleash capacity onto the market, taking advantage of robust prices and decent margins.
“Mills in most cities were ramping up output as soon as heating seasons finished in mid-March, although some cities prolonged the curbs,” said Richard Lu, analyst at CRU consultancy in Beijing.
Output over the first three months of the year was 212.15 million tonnes, up 5.4 percent on the same period last year, according to the bureau.
Coke output in March fell 4.7 percent to 35.57 million tonnes compared to the same period last year, the data showed. Year-to-date, total production dropped 3.2 percent to 102.85 million tonnes. (Reporting by Muyu Xu and Josephine Mason Editing by Joseph Radford)