November 6, 2018 / 2:35 AM / 7 days ago

Baowu says China steel output to hit record level in 2018

An employee works at the production line of a Dongbei Special Steel factory in Dalian, Liaoning province, China October 31, 2018. REUTERS/Stringer

SHANGHAI (Reuters) - China’s steel output will climb above 900 million tonnes in 2018, the chairman of the country’s largest producer of the building material said on Tuesday, marking the highest level on record.

Chen Derong, chairman of Baowu Steel, was speaking at the China International Import Expo, or CIIE, in Shanghai.

China, which produces and consumes about half the world’s steel, saw output hit a record 831.7 million tonnes last year. In the first three quarters of 2018, production had reached 699.4 million tonnes, up 6.1 percent from the same period in 2017.

Chinese mills earlier ramped up output to cash in on strong profit margins, with steel prices driven higher by production curbs as part of Beijing’s campaign for clearer skies.

But steel production for the rest of the year is likely to remain high, analysts say, with China allowing provinces and regions to set their own output restrictions during winter instead of repeating last winter’s blanket curbs.

The average profit margin at steel mills is around 1,000 yuan ($144.48) a tonne, according to Huatai Futures.

($1 = 6.9214 Chinese yuan)

Reporting by David Stanway and Meng Meng; Editing by Richard Pullin and Joseph Radford

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