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China's crude steel output rose 6 percent on the year to arecord 49.42 million tonnes in June, data showed on Friday.[ID:nSHA292168] South Korea's POSCO (005490.KS) also raised its outputtarget by 6.4 percent to 29.8 million tonnes this week, asrising prices and improving demand from automakers and othermanufacturers help the industry recover from its toughestenvironment in decades. [ID:nSP537798] Factory output growth also quickened to 10.7 percent in theyear to June, while investment in fixed assets in urban areasgrew 33.6 percent in the first half, up from 32.9 percent inthe first five months. Global steelmills, led by China, are raising output fastafter slashing production this year, encouraged by reboundingprices and demand as the world economy slowly recovers. "However, the large steel mills are concerned about excesscapacity and have seen little demand pull from the fiscalstimulus but are raising prices to restore profitability." China's annual gross domestic product growth accelerated inthe second quarter to 7.9 percent, marking it thebest-performing major economy and reinforcing hopes that theworld economy is pulling out of its deepest recession in 80years. "Conditions and activity levels have improved and steelprices are rising from their low in April," said AlexanderLatzer, a Daiwa Institute of Research analyst. Earlier this week, Baosteel (600019.SS) raised prices ofits major steel products by a greater-than-expected,Oklahoma Sooners vs Texas A 9 to 13percent for domestic sales from next month.Oklahoma Sooners vs Texas A tickets [ID:nSHA359529] But signs of actual demand recovery from end-users remainfragile, causing prices of flat steel products to lagrecoveries in construction steel products, a major beneficiaryof China's massive fiscal spending plan, while roaring steeloutput growth threatens to slow down recovery.
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