Steel output growth slows: Credit Suisse

Global steel production expanded at its slowest pace in 17 months in June, indicating that Chinese mills may be responding to the government pressure to restrain output, Credit Suisse said.

Steel output rose 5.7 per cent to 110.6 million tonnes last month, from a year earlier, the International Iron & Steel Institute said yesterday. That was the sixth monthly slowdown in growth and the smallest gain since January 2006, Credit Suisse said in a note dated yesterday. Chinese output rose 13 per cent to 41.5 million tonnes, the least since December 2002.

"This is an increasingly clear sign that Chinese production may at last be coming under control,'' Credit Suisse analysts, including the London-based Michael Shillaker, said in the report. Chinese demand for steel is expanding at about 18 per cent, "so production is now seriously undershooting".

China's economy expanded at the fastest pace in 12 years in the second quarter, powered by investments in factories and real estate. Chinese demand for steel will total 443 million tonnes next year, accounting for more than a third of the global total, the Brussels-based IISI forecast in a March 26 report.