China has produced 72 million mt of crude steel in March, the highest on record and up 1.8% from March 2016, data released by the National Bureau of Statistics Monday showed.
The previous record high was in March 2016, at 70.65 million mt.
The March 2017 output was a 17.8% jump from February, S&P Global Platts calculations showed.
January and February data are always released together because of the Lunar New Year holidays, and the February figure was derived by multiplying the number of days in the month by the average output per day over the two months.
March output was equivalent to 2.32 million mt/d of crude steel, which was 6.4% higher than the daily average in February, and was also a record high.
The glut was driven mainly by China's crackdown on induction furnace operators, which caused a rally in domestic steel prices and margins, a Shanghai-based trader said.
Rebar in Beijing reached the highest since July 2012 at Yuan 3,960/mt ($575/mt) ex-stock on March 15, while hot-rolled coil in Shanghai rose to the highest in more than nine weeks at Yuan 3,875/mt ex-stock on February 21, Platts data showed.
As profits rose, steelmakers, especially those producing longs, ramped up operating rates to replace output lost from the shutdown of induction furnaces, the trader said.
For the short term, elevated output does not appear to be abating. "Societal inventory levels are falling, but we understand that stock levels at steel mills for rebar are increasing," said a second Shanghai-based trader.
Over January-March, China's crude steel output reached 201.1 million mt, up 4.6% year on year.
China produced 62 million mt of pig iron in March, up 1.3% year on year.
Pig iron output in January-March increased 4.1% year on year to 175.64 million mt.
