Chinese steel production grows fastest in two years

China's steel mills increased their monthly output in November, the fastest growing in more than two years. Strong demand from infrastructure has spurred producers to increase production for the ninth straight month, even when coking coal prices are prohibitively high.

Steel output in November rose 5 percent to 66.29 million tonnes year-on-year, the fastest growth since June 2014, according to the National Bureau of Statistics.

Despite skyrocketing costs for major steel raw materials such as coking coal and iron ore, smelters are still making good profits, said Wang Yilin, senior steel analyst at SINOSTEEL Futures: “Steel mills want to increase production due to high margins and infrastructure costs announced by Beijing. "

Analysts expect steel output to decline in December, as smelters are required to carry out annual scheduled maintenance. Total production in the first 11 months of 2016 increased by 1.1 percent to 738.94 million tonnes.