Steel production in China to rise 6%, MIIT forecasts

Output will reach 530 million metric tons, Zhang Dechen, a researcher at the ministry, said today at a conference in Shanghai. Production was 500.5 million tons in 2008.

China is spending 4 trillion yuan ($586 billion) to revive its economy, bolstering demand for steel used in cars, houses and railways. The Chinese cabinet said Aug. 26 it's studying curbs on overcapacity in industries including steel.

“The room for domestic demand to consume the redundant capacity is very limited,” Zhang said today. “The pace to phase out obsolete capacity is too slow.”

The government is drawing up a plan to speed closure of outdated steel plants, including restricting bank loans to companies with the facilities, Zhang said. China has 660 million tons of steel capacity, the ministry has said.

Steel output jumped to a record in August, a fourth month of gain, spurring a 19 percent decline in benchmark Chinese steel prices since Aug. 4. China produced 369 million tons in the first eight months of this year, according to Bloomberg data.

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