China's crude steel output in January and February combined rose 2.4 percent from a year earlier and rebounded from a nationwide production cut late last year, the Ministry of Industry and Information Technology said on Tuesday.
This means crude steel production totalled 81.36 million tonnes in the first two months of this year, from a combined 79.45 million tonnes during the same period last year, according to a Reuters calculation.
Steel production has recovered a bit as steel mills have been gradually consuming high-priced raw materials they stocked in the second half last year and re-started some capacity, the ministry said in a statement issued ahead of a news conference.
Output of steel products in the first two months increased 3.1 percent, the ministry added.
In February alone, daily production of crude steel by the 70 firms that are members of the China Iron and Steel Association reached 1.139 million tonnes, up 7.9 percent from January, it added.
Mills under the association account for 80 percent of China's total steel output.
However, recovering steel production did not necessarily translate into profits, because weak domestic and overseas demand hurt local sales and exports, the ministry said.
Recently, production capacity in the steel industry was released quickly without a corresponding support from market demand, so that steel prices fell again after rebounding for a while, the ministry said.
It also said the steel industry, as well as nonferrous metal, petrochemical and electronic sectors, may be unprofitable or nearly so in the first half of the year.
(Reporting by Eadie Chen and Jason Subler; Writing by Alfred Cang; Editing by Ken Wills)
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