China’s crude steel output rises in 2011 but growth slows

One of the leading indicators of the Chinese economy, crude steel production, grew by 8.9% in 2011 to 683.3 million tonnes. While this growth is relatively high compared to other countries and China remains the world’s largest steel producer, the growth rate is lower than the 9.3% growth experienced in 2010.

By comparison, global crude steel production grew by 6.8% in 2011, according to a press release by World Steel Organisation on Monday.

The chinese data was revealed by the National Development and Reform Commission (NDRC). The data also showed that production of rolled steel slowed by 2.4% to 881.31 million tonnes. China uses its own crude steel and crude steel imports to make rolled steel.

China’s imports of iron ore went up by 10.9% y-o-y to 686.06 million tonnes in 2011, while steel products exports rose 14.9% y-o-y to 48.88 million tonnes.

Prices of steel continued to decline through December 2011 with the composite index of steel price falling to 120.95 points from 122.39 the previous month. The falling steel price reflects the levels of construction going on in the country. China now effectively sets the global steel price.

According to NDRC, in last year’s first three quarters, the index swung between 130.74 points and 136.04 points. Domestic demand for steel in  China has declined amid concerns of a slowing economy in this south Asian economic powerhouse.