BEIJING, March 6 (UPI) -- Steel production increases in China are expected to slow in 2008 in part due to 344 plants shuttered for environmental and efficiency concerns, Xinhua said.
But, Qi Xiangdong, director of the China Iron and Steel Association, said the major reason for the reduced growth was the rising price of iron ore.
Crude steel output would grow between 6.3 percent and 10.4 percent for the year, Qi said, compared with 15.66 percent growth in 2007. Rolled steel output was expected to grow 7 percent to 12.3 percent, a decline from the 2007 growth rate of 22.69 percent.
Prices for iron ore rose 18.62 percent in 2004. Ore rose 71.5 percent in 2005 and 19 percent in 2006, Xinhua reported.
China has also reduced its iron smelting capacity by 29.4 million tons and its steel smelting capacity by 12.21 million tons in efforts to modernize plants and reduce pollution, the state-run news agency said.
"On one hand, the outdated production capacity has been eliminated. On the other hand, the newly-developed capacity has not been fully put into use, leaving a temporary gap between demand and supply," Qi said.
