China's steel mills churned out record amounts of the construction material in June as producers rushed to cash in on hefty margins, even as the trade spat between China and the US intensified.
China, which accounts for half of the world's capacity, produced 80.2 million tons of crude steel last month, National Bureau of Statistics data showed on Monday.
June output was below May's record 81.13 million tons, but June has one less day, setting a new daily average production record for a third month in a row at 2.67 million tons, according to Reuters' calculations.
"Steel mills were dashing to reap as much of the bumper profits as they could despite environmental checks," said Richard Lu, analyst at CRU in Beijing.
The data may further inflame a bitter China-US trade row.
China's steel exports rose last month to 6.94 million tons, their highest since July 2017, even after Washington imposed import duties to protect US industries.
The production increase also comes as China has shuttered some mills to help curb choking pollution and ramped up environmental inspections, suggesting that newer mills have beefed up operations to cash in on fat margins.
China's steel output in the first half rose 6 percent to 451.2 million tons.
Steel prices have soared over the past year due to firm demand and on concerns about tightening supplies of metal, used in construction and automotives, as the central government seeks to close inefficient mills and clamps down on smoke-stack industries to clean the nation's skies.
Lu estimated that mills were earning a profit margin of about 800 yuan ($119.50) per ton of steel, while analysts at Huatai Futures put profit margins for mills in northern China at over 1,000 yuan a ton, one of the highest on record.
Monthly utilization rates at mills reached 71.6 percent in June, the highest since October before winter production curbs had taken effect, according to Reuters calculations based on statistics from Mysteel consultancy.
