China Mar. Steel Output Growth May Hint Economic Recovery But Likely Leads to Overstock

BEIJING, Apr. 20 -- China March steel output rose 12 percent month on month, which may indicate the country's economic stimulus package starts playing positive effects but also triggers overstock worries if the economy fails to keep growth momentum, some analysts say.

    China's crude steel output reached 45.1 million tons in March, down 0.3 percent from a year earlier, but its January-March steel output grew 1.4 percent to 127 million tons, according to data released by the National Bureau of Statistics Friday.

    The Thursday official data showed that country's March urban fixed asset investment (the benchmark indicator for capital expenditure) rose 30.3 percent over the same period last year, higher than the average growth rate of 26.5 percent in the first two months this year.

    China March industrial added value grew 8.3 percent year on year, higher than the 3.8 percent for January and February. Industrial production is a main force to drive China's economy, which lays emphasis on manufacturing industry.

    Its automobile sales volume set a monthly fresh high in March. China's housing sales and air traffic volume have presented persistent growth so far this year after sharp fall last year.

    However, some analysts warn that the rapidly growing steel output is likely to raise stocks since it's too early to say the economy has been warming up comprehensively.

    Steel makers were active in raising their output in early March and failed to make quick response to sliding steel prices. It is predicted that the domestic steel stocks would stay at a high level due to faltering steel consumption.

    The relatively high steel output in March may trigger massive production cut in April.

    The daily steel output in March arrived at 1.45 million tons, striving flat with that of the previous month, and higher than 1.33 million tons in January.

    China March copper output (a key indicator for industry climate) increased 5.2 percent year on year to reach 319,000 tons. Its lead output went up by 46 percent in March, and zinc output up 8.2 percent.

    (Source: chinamining.org)