Global crude steel output rose by 0.8 per cent last year, industry data showed yesterday, as mills in top producer China churned out more metal to meet higher demand even as Beijing cracked down on excess capacity.

Global crude steel output in 2016 reached 1,629 million tons in 2016 versus 1,615 a year earlier, with output in China rising 1.2 per cent to hit 808 million tons, according to the World Steel Association.

China accounts for about half the world’s steel output and around half of the excess global steelmaking capacity, estimated at 350 million tonnes.

Beijing last year cut 45 million tons of steelmaking capacity, but much of it was already idle. As a result, steel output in the country continued to rise as mills were tempted by a 60 per cent annual surge in steel prices that came in part as a result of government rhetoric on steel capacity cuts.

China is planning to close 100-150 million tons of annual steelmaking capacity over the 2016-2020 period. It has pledged this year to eliminate all low-quality steel production by the end of June – a move that should cut about four per cent of steel output.

“Substantial steel prices rises were seen in all markets in the fourth quarter of 2016. In China, demand last year was supported by a sharp upturn in real estate investment,” said Chris Houlden, research manager at consultants CRU.  Outside China, WorldSteel data showed output in Japan, the world’s second largest producer, fell 0.3 per cent to 105 million tons, while output in India, the world’s third largest steelmaker, surged 7.4 per cent to 96 million tons.

Output in the European Union fell by 2.3 per cent and remained flat year-on-year in North America, the data showed.