* U.S. steel production rises 1.7 percent in June
* Chinese, global daily production hits new record
* Steel output may see a correction in H2-analysts
By Tasim Zahid and Silvia Antonioli
LONDON, July 20 (Reuters) - Global steel production rose again in June, led by record crude output in China, and U.S. steelmakers also made more, despite slow growth in the world’s largest economy, data showed on Wednesday.
But production may ease later this year as steelmakers, facing softer demand in the last few months, could reduce output to defend profitability, some analysts said.
Global crude steel production rose 8 percent to 127.746 million tonnes year-on-year in June 2011, according to figures from the World Steel Association.
This represents a record daily production level of almost 4.3 million tonnes, compared with less than 4.2 million tonnes per day in May.
Crude steel output from China, the world’s top producer and consumer of the metal, rose to 59.932 million tonnes in June, up 11.9 percent from the same month last year.
This was also an increase to a new record high in daily terms to slightly less than 2 million tonnes, from slightly more than 1.9 million per day in May.
“The figures are slightly above expectations,” Colin Hamilton, an analyst at Macquarie said.
“This is another record high for both the Chinese as well as the global market. There are no dramatic changes, but the big surprise was North America, which has grown month-on-month, despite a degree of economic concern.”
Global crude steel production in the U.S. grew to 7.213 million in June, a 1.7 percent increase from June last year.
China’s tighter monetary policy has not had any significant impact on steel production, even though some analysts were expecting a slowdown.
“The Chinese production was high which shows that their economy is still strong despite economic tightening,” Hamilton said.
There are however concerns about declining steel prices which may push steelmakers to cut supply to tackle softening demand.
“We think there will be a weak third quarter and steel mills profitability might come under pressure...there is a slowdown in consumption in China that is evident by the falling steel prices,” Chris Houlden, Principal Consultant at the CRU.
“The production will have to be adjusted... (Only) If the stock levels go down, we might see a rise in the price.”
editing by William Hardy