(Minews) - China's crude steel output fell 1.5 percent to 130.5 million tonnes for the first two months of 2015, government data showed on Wednesday, as a supply glut and slower demand growth led mills to bring forward scheduled maintenance to curb output.
Average daily steel output slipped to 2.212 million tonnes, according to Reuters' calculations based on data from the National Bureau of Statistics, although the figure was up 0.7 percent from December.
China's statistics bureau releases combined output data for the first two months of the year in order to avoid monthly data being skewed by the Chinese new year holiday.
"A slower economy has hit production in power-intensive sectors such as steel. And a weak property market has also piled pressure on steel demand," said Cao Yang, an analyst with Shanghai Pudong Development Bank in Shanghai.
Steel prices lost 28 percent during 2014, due to overcapacity and the economic slowdown, and industry sources expect more inefficient steel mills to shut down this year, given tougher environmental laws.
Production by large Chinese steel mills dipped for much of January and early February but jumped 8 percent in the final 10 days of February to 1.77 million tonnes a day.
China, the world's largest steel producer and consumer, set its annual economic growth at about 7 percent this year, the lowest rate in a quarter of a century. The "new normal" is expected to weigh down demand for commodities.
Steel production grew 0.9 percent to 822.7 million tonnes in 2014, it slowest rate in more than three decades, as its cooling economy curbed demand and the government moved to tackle overcapacity and pollution.
Li Xinchuang, the vice secretary general of the China Iron & Steel Association, forecast in December that Chinese steel production would rise to 834 million tonnes in 2015.
