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China's Investment in Iron and Steel Restrained

Posted on: Saturday, 30 July 2005, 09:00 CDT

China's investment in iron and steel restrained

BEIJING, July 29 (Xinhua) -- China's blind investment in the iron and steel sector has been restrained, with the investment in the industry amounting to 97.4 billion yuan (about 12 billion US dollars) in the first six months of this year, a year-on-year increase of 18. 6 percent, or 33 percentage points lower than the same period of last year.

Beijing-based China Securities Journal reported on Friday that the growth of the country's steel consumption, which stood at 20 percent each year over the past three years, dropped to 15.7 percent in the January-June period.

Quoting a report on the sector's performance released by the State Development and Reform Commission on Thursday, the paper said iron and steel production, however, is increasing on a monthly basis, with steel output reaching 173.12 million tons. The industry's sales income amounted to 1.1399 trillion yuan (about 140.5 billion US dollars), according to data from the commission Meanwhile, steel exports continued to grow and reached 11.57 million tons during the six-month period, representing a year-on-year increase of 154.1 percent. China also imported 13.22 million tons of steel, down 26.8 percent from the same period of last year. Imports of iron ore reached 131.35 million tons, up 34.3 percent from the January-June period of 2004. China's iron and steel sector is currently facing the problem of overproduction on the one hand, and decreasing consumption on the other hand due to the central government's macro-regulation and control policy.

Experts warn that the dramatic ups and downs of the steel price is not good to the healthy development of the industry.

Source: Xinhua News Agency - CEIS

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