Data released on Monday showed Chinese steel output in September rose 5.3% from the year before to 71.8m tonnes; not far off the record 73.2m tonnes produced in August.
For the first six months Chinese furnaces pumped out 5.5% more steel, to just under half the global total according to the World Steel Association.
As its pollution fight intensifies, the restrictions Beijing has placed on steelmakers from October to March are expected to lead to production cuts of as much as 30m tonnes.
According to London-based consultants CRU, China is on track to cut 240m tonnes of annual capacity by 2020 from its peak in 2015, which is boosting profitability in the domestic industry and pulling up steelmaking raw material prices in the process.
World steel output in September was the lowest since February, but global steel production is still higher by 5.3% year on year during the first nine months of 2017 to 1.27bn tonnes.
Despite contracting by 5.4% from the prior month, US steel output in September was up 8.6% year-on-year. Year to end-September output is up 3.1% after two years of contraction as higher prices and diminished competition from imports encourage the restart of idled plants.
India is on course to overtake Japan as the world’s number two steel producer after growing output by 5.7% from January to September to 75.3m tonnes.
The exception among the top producers, production from Japanese mills are down slightly year to date and is likely to contract further during the final quarter of 2017 as the scandal surrounding Kobe Steel continues to deepen.
Steelmakers in the European Union are also ramping up production with a 4.1% rise to end September at 126.4m tonnes.
Average global steel prices have climbed by nearly half since hitting 12-year lows at the end of 2015 and the global industry is worth around $900 billion a year.
The Northern China import price of 62% Fe content ore eased on Monday to trade at $60.30 per dry metric tonne according to data supplied by The Steel Index. Iron ore has averaged $71.75 since the start of the year compared to $56.50 over the course of 2016.
Steelmaking coal (premium hard-coking coal FOB Australia) was pegged at $177.90 a tonne on Monday down 21% since the start of the year, but more than double multi-year lows hit in February last year.