DAILY crude steel output in China hit a fresh record in June, even as the government ordered a series of environmental inspections at steel mills across the country.

Steel mills produced 80.2 million tons of crude steel last month, according to data from the National Bureau of Statistics. This was down 1.1 percent from May’s record 81.13 million tons, but June has one less day.

Daily average production in June hit 2.67 million tons, higher than May’s record of 2.62 million tons, according to media calculations.

“Steel mills were dashing to reap as much of the bumper profits as they could despite environmental checks,” said Richard Lu, analyst at CRU in Beijing.

For the first half of the year, China’s steel output of 451.16 million tons rose 6 percent from 419.75 million tons in same period last year.

Profit margins for steel have risen strongly due to firm demand and the country’s capacity curbs.

Lu estimated that mills were currently earning a profit margin of about 800 yuan (US$119.50) per ton of steel, while analysts at Huatai Futures put profit margins for mills in northern China at over 1,000 yuan a ton.

The government last month sent teams of inspectors to 10 regions, including the top steelmaking provinces Hebei and Jiangsu, to revisit the sites of thousands of violations uncovered by earlier probes, and said it will expand environmental checks to more cities and regions through to April next year.

Analysts also expect more cities to adopt stringent production curbs. Last week, top steelmaking city Tangshan had ordered mills to cut production for six weeks over summer.

“Steel output may not necessarily go down even though stricter restrictions are on the way,” said Lu. (SD-Agencies)