China ramped up its crude steel production in March, reaching its highest monthly output in nearly a year as stronger margins and robust overseas demand fueled activity. The country churned out 92.84 million metric tons of crude steel last month—a 4.6% jump from a year earlier and the most since May 2024, according to data released by the National Bureau of Statistics (NBS) on Wednesday.

The figure aligned closely with market expectations, translating to an average daily production of roughly 2.99 million tons. That’s up from 2.82 million tons in the first two months of 2025 and slightly higher than March 2024’s daily rate of 2.85 million tons, according to Reuters estimates.

However, analysts caution that April may not maintain the momentum. Growing tensions between China and the U.S. are casting a shadow over export prospects, and domestic demand remains uncertain.

“Most steelmakers are holding steady at current production levels,” said Pei Hao, a senior analyst at Freight Investor Services in Shanghai. “Given the limited upside in output and softening sentiment around infrastructure demand, we expect hot metal production to plateau or decline.”

Over the past two years, Chinese steelmakers have battled thin margins amid sluggish demand and a persistent supply surplus, largely driven by the country’s uneven post-COVID recovery.But March brought a reprieve—thanks to improved profitability, many producers ramped up output. According to industry tracker Mysteel, about 53% of steelmakers were operating profitably in March, up sharply from just 25% a year earlier.

While the property market continues to underperform, solid demand from the manufacturing sector and strong export orders have helped cushion the blow. China’s manufacturing sector, in fact, expanded in March at its fastest rate in a year.

Overall, crude steel production in Q1 2025 edged up 0.6% year-on-year to reach 259.33 million tons.