China steel rally predicted to sag

A jump in Chinese steel production is unlikely to last, according to analysts, following a surge last month.

Business Insider and others note that crude steel production in China was 70.65 million tonnes in March (up three per cent compared to March last year).

Steel exports were up 23 per cent in March, 23 per cent higher than for that month last year.

The jumps noted by the China National Bureau of Statistics are not likely to be sustained, and nor will the rally in iron ore or steel prices, say observers.

Fairfax reports that last week Rio Tinto and Liberum Capital both tipped the China steel production surge to fall off.

The price of steel, up 37.5 per cent since December, is also likely to slump, said HSBC, “given mills are ramping up output following improving profitability and traders have finished restocking activity.”