THE country’s daily steel output rose in January and February as mills in the world’s top producer raced to take advantage of high prices, even as worries mount about a growing surplus and slowing demand from the construction sector.

The production rise came despite the government’s crackdown on heavy manufacturing in 28 of its smoggiest cities as part of its war on winter smog. Those curbs are set to be lifted in most regions today, which marks the end of the four-month winter heating season.

Chinese mills produced 136.82 million tons of crude steel in January and February, up 5.9 percent from a year earlier, data from the National Bureau of Statistics (NBS) showed yesterday.

The NBS only provided combined output figures for January and February due to the distortive effects of the Lunar New Year holiday that sees most of the factories shut down for a week.

Daily output was 2.32 million tons, up 7.4 percent from December and up more than 5 percent on the same two months last year, according to media calculations.

It was the highest daily rate since October, before the winter heating season started in November when strict output curbs came into force, and the fastest pace for the first two months of the year on records going back to 2015.

China’s push to close older, polluting steel mills drove up local steel prices, encouraging other producers to boost output in anticipation of a seasonal pickup in demand after the holiday period, despite the government’s output curbs, analysts said.

Qiu Yuecheng, analyst at steel trading platform Xiben New Line E-commerce in Shanghai, said the output was higher than expected.

“Mills are ramping up in response to production driven by solid profits,” said Qiu.

(SD-Agencies)