China H1 steel output rises 1.2% to record high

Shanghai, July 17 (Gasgoo.com) China's crude steel output, the largest in the world, rose by 1.2% from a year earlier to a record 266.6 million metric tons in the first half this year, according to the National Statistics Bureau, Bloomberg reported.

Steel prices in China have gained 17% since April 1 as Wuhan Iron & Steel Co. and Baoshan Iron & Steel Co. benefited from the government's 4 trillion yuan ($586 billion) stimulus package, which has been taking effect to boost China's steel output month by month.

Profits at steelmakers will rise in the second half by taking advantage of higher prices, industry analyst said. The steel revival has hampered China's ability to bargain down iron ore prices paid to Rio Tinto Group, Vale SA and BHP Billiton Ltd.

Chinese steelmakers posted an aggregate profit in May, the first time in eight months because of higher prices. They have been seeking a discount of as much as 45% for contract iron ore prices, more than the 33% cut agreed to by Japanese and Korean rivals with Rio Tinto.

Talks have been overshadowed by the detention of four Rio executives on July 5 by Chinese authorities for allegedly stealing state secrets that they said harmed the nation's economic interest and security.

Chinese steel consumption is gaining as the government spends on automobiles, roads, railways and infrastructure. Other measures have sent passenger car sales soaring 26% in the first half to a record high.