China’s steel mills defied credit tightening, razor-thin margins and a possible power supply crunch to produce a record 60.25Mt in May, although daily output declined slightly.

Crude steel output fell to 1.94Mt a day from April’s peak of 1.968Mt, but the industry still expects production to remain high until a seasonal lull in demand hits in July. Overall steel output was up 2% from April, according to data issued by the National Bureau of Statistics.

Steel demand normally begins to fall in the hot summer months as construction activities slow.

China’s tightening measures have had no noticeable impact on steel output, and they have also failed to rein in inflation which reached a 34-month high of 5.5% in May.