Statistics

China H1 crude steel output grows 21%

(Xinhua)
Updated: 2010-08-03 17:20

BEIJING - China's crude steel output in the first half of the year hit 323 million tons, up 21.09 percent year-on-year, sparking concern about increases in inventory and second half production.

Crude steel output per day in the first half averaged 1.7855 million tons, up 14.77 percent compared to the same period last year, Luo Bingsheng, vice president of the China Iron and Steel Association (CISA), said Tuesday.

The growth in output came on the back of increased domestic demand and expectations for steel price rises, Luo said.

China's economy expanded 11.1 percent year-on-year in the first half of 2010, with fixed-asset investment rising 25 percent to 11.4187 trillion yuan ($1.67 trillion).

Related readings:  Steel firms may face losses in H2   Steel prices set to firm up  Severe overcapacity in China's stainless steel industry  Steel industry may sell inventories for a steal

But the rapid growth in production is leading to oversupply, with CISA figures showing total inventory at China's 22 large and medium-sized cities had reached 10.8 million tons by the end of June, up 34.16 percent since the beginning of the year.

Luo said oversupply may lead to a decline in steel prices and he forecast output to fall in the second half.

The increase in output is also affecting the environment.

CISA figures showed the sector's total electricity consumption in the first half jumped 29.3 percent year-on-year while exhaust gas emissions rose 13.18 percent.