China's steel production in January-February increased since December 2018

China's daily steel production surged in January and February as the world's largest steelmaker's mills boosted production amid stable steel margins and eased environmental restrictions.

The average daily steel output for the two months reached 2.54 million tons, compared with 2.46 million tons in December and 2.32 million tons in the same months last year.

The National Bureau of Statistics, which released data on Thursday, is providing summary outputs for January and February only to smooth out the impact of the timing of the Lunar New Year holiday, which fell into early February this year.

According to official data, the total volume of steel production in the two months amounted to 149.58 million tons, which is 9.2 percent more than a year earlier.

According to data monitored by Jinrui Futures, production growth at steel mills increased in January and February, while profits from rebar products in construction were up more than 20% from December.

Rebar benchmark prices on the Shanghai Futures Exchange have risen 10 percent in the past two months to reach a high of 3,908 yuan ($ 582.82) per tonne on February 11, the highest level since late August.

Mills also took advantage of a change in winter pollution control restrictions after Beijing shut down overall heavy industry production amid growing fears of a slowdown in economic growth. Instead, local authorities were allowed to take action based on regional emission levels.

However, production in March is likely to be limited due to tighter pollution control measures in northern China. Air pollution in 39 smog-prone cities in northern China has skyrocketed, according to official Reuters data.

The cities of Tangshan and Wuan in the large steel province of Hebei have already tightened restrictions on heavy industry production in March.

Weekly utilization rates at steel mills across China fell to 62.98 percent last week as of March 8, their lowest level in a year, data compiled by consulting firm Mysteel showed.