The record volume of steel exports from China will probably abate after prices surged in the largest producer, boosting the attractiveness for mills of local sales against shipments overseas, according to commodity trader Noble Group Ltd. “The main reason why we’re going to see lower Chinese steel exports, at least for the next few months, is that the Chinese steel prices have way outperformed steel prices in other regions since December,” Gueorgui Pirinski, a carbon-steel materials analyst at Noble Group, said at a conference in Singapore on Wednesday. “We’ve had a massive 30, 40 percent rally.” Exports from China, which accounts for about half of global output, surged to an all-time high last year as producers contended with sinking local prices and a glut of material. The flood boosted competition in Asia, Europe and the U.S., hammering profits at mills worldwide and spurring an increase in trade tensions amid claims the rising volumes from China were being sold too cheaply. This year, steel prices in China have rebounded in a shift that Pirinski said was driven by lower output. ‘Very Aggressive’ “The major driver of this reversal in trend has been the very aggressive curtailment in domestic steel production in China,” said Pirinski, who raised the possibility that output may now pick up, endangering the recovery in steel prices. “We will see a material pickup in domestic production of steel in China—that will then put into question the sustainability of the steel price.” Steel reinforcement bar in China, a benchmark product used in construction, has jumped 25 percent in 2016 after five years of losses. The contract price on the Shanghai Futures Exchange rallied to 2,240 yuan ($345) a metric ton on Wednesday, the highest since June. It bottomed in December at 1,618 yuan. China’s steel exports expanded almost 20 percent to a record 112.4 million tons in 2015, according to customs data released in January. In February, sales of steel products dropped 17 percent to 8.11 million tons, the lowest since March last year, government data show. The unprecedented tide of cheap shipments from China prompted a backlash from Europe, India and the U.S., which have moved to raise tariffs as local mills complained. Still, the spread of protective trade rules wasn’t a cause for slowing shipments, according to Pirinski. The reason “China steel exports are falling is not anti-dumping duties, it’s not all the posturing,” he said.