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China steel output surges to record in May

China produced 81.13 million tonnes of crude steel in May, up 5.8% month over month and 8.9% year over year, data from the National Bureau of Statistics showed, Reuters reported June 14. Year-to-date output rose 5.4% to 369.86 million tonnes.

The increased output comes despite pressure on China to reduce its capacity to stem the current glut in the market that has caused prices to drop.

European and U.S. leaders have pressed China to speed up its planned capacity cuts as overproduction threatens other steelmakers.

Figures show the utilization rate at steel firms across China was above 71% from late May, despite winter production curbs that were enforced from October to March, Reuters reported.

China's output has been increasing despite Beijing's campaign to shut down 255 million tonnes in steel production capacity since 2016.

China-produced steel has also increased as companies skirted capacity cuts at home and stiff U.S. steel tariffs by either building or acquiring 13.5 million tonnes of capacity overseas.

China will build an additional 8.6 million tonnes over the next few years, Morgan Stanley analysts said.

Recently, Zimbabwe and China signed a $1 billion memorandum of understanding to establish a steel plant that can produce up to 2 million tonnes of steel a year for 25 years, Xinhua News Agency reported June 11.