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China's crude steel production rose 4.1% in May from the previous month, Reuters reported, as disruptions due to the country's COVID-19 restrictions gradually eased.
Data from the National Bureau of Statistics (NBS) showed on Wednesday that the world's largest steelmaker produced 96.61 million tons of steel last month, up from 92.78 million tons in April.
Average daily steel production in May was 3.12 million tonnes, according to a Reuters analysis of NBS data. This is up from 3.09 million tons of daily production in April and was the highest level since June 2021.
The increase in production was due to a reduction in the supply of raw materials due to the gradual easing of transport restrictions after the removal of quarantine.
However, China's strict "COVID dynamic zero" policy has hurt manufacturing activity and steel mills' profits are shrinking due to weak demand and high raw material prices.
China's manufacturing capacity inflation eased to its slowest level in 14 months in May due to weak demand for steel, aluminum and other key industrial commodities due to tight COVID-19-related restrictions and countering the global trend of rapid price increases.
The weakness of the construction sector, which accounts for about half of all steel used in China, has prompted some processors and trading firms to sell inventory rather than store it for later sale to end users.
China has pledged to cut steel production this year to protect the environment, promising annual cuts.
In the first five months, China produced 435.02 million tons of the metal, down 8.7% from the same period a year ago, according to the Bureau of Statistics.
