April steel output at 85.03 mln T vs 78.98 mln T in March

* Average daily output 2.83 mln T vs 2.55 mln T a month earlier (Adds details, analyst quotes and chart)

BEIJING, May 15 (Reuters) – China’s steel mills ramped up production 7.7% in April from the previous month, boosted by robust domestic demand as the world’s second-biggest economy began to pick up after easing curbs imposed earlier in the year to counter the coronavirus epidemic.

Total crude steel output last month was 85.03 million tonnes, data from the National Bureau of Statistics (NBS) showed on Friday, up from 78.98 million tonnes in March, and also 0.2% higher than in April 2019.

Average daily output last month climbed to 2.83 million tonnes, up 11% from a more than one-year low of 2.55 million tonnes in March. April’s daily production was the highest since June 2019, according to Reuters calculations based on the official data.

In the first four months of the year, the world’s top steel producing country churned out 319.46 million tonnes of the metal, up 1.3% from the same period last year, the NBS data showed.

Production at Chinese steel firms – especially for construction materials – has picked up quickly since late March boosted by a revival of downstream consumption.

Daily trading volumes of steel products like rebar and wire rod compiled by consultancy Mysteel have risen to levels higher than before the coronavirus outbreak. According to Mysteel, blast furnace capacity utilisation rates at 163 mills rose to the highest in nearly 11 months as of May 15 at 85.6%.

The rapid ramp-up has raised concerns among analysts and industry bodies about a risk of oversupply given the country is still digesting high inventories and global steel demand remains weak.

The China Iron and Steel Association has urged authorities to look closely at plans by steelmakers for new capacity and to crack down strictly on any irregularities.

Seasonal output at non-major mills in China from Feb. 20 to the end of April surpassed average production levels over the past four years.

“Output at big mills is normally stable while smaller firms have been boosted by recovering profit margins recently,” said Liu Xinwei, iron and steel researcher at Sublime China information.

Liu said there was a risk of imbalance between supply and demand amid the robust production, and steel prices in the medium term could be relatively weak.