December 4, 2017 / 2:23 AM / in a year

UPDATE 2-China's 2018 steel output seen rising even after mill closures

    * China output seen at 832 mln T in 2017, 838 mln T in 2018
    * Steel demand to rise in all downstream sectors in 2018
    * Iron ore demand to rise 1.3 pct to 1.122 bln T in 2017

 (Add details, table)
    BEIJING, Dec 4 (Reuters) - China's crude steel output is
expected to rise 3 percent to 832 million tonnes this year, and
by a further 0.7 percent in 2018, as major mills ramp up
operations, offsetting the impact of the shutdown of outdated
plants, a government body said on Monday.
    Output in 2018 will be 838 million tonnes, said the China
Metallurgical Industry Planning and Research Institute (MPI) in
a report.
    "The growth comes after Beijing's crackdown on illegal
low-grade steel products, which were never included in the
official statistics," it said. 
    "The supplies are now filled in by legal steel mills."
    A strong rebound in China's industrial activity this year,
led by steel and other metal producers, has helped produce
forecast-beating economic growth of nearly 7 percent.
    The world's largest steel maker produced 808 million tonnes
of crude steel in 2016 and eliminated around 120 million tonnes
of low-tech steel product capacity in the first half of this
    Iron ore demand in the world's top buyer is expected to rise
1.3 percent to 1.122 billion tonnes this year from 2016 and dip 
0.2 percent to 1.12 billion tonnes in 2018, according to the MPI
    The MPI expects that China will export a net 63 million
tonnes of steel products in 2017 and 2018, up 3 percent and 0.7
percent respectively.
    It also predicts the country's steel demand will rise to 726
million tonnes in 2018 from 722 million tonnes in 2017, prompted
by steady economic growth.
    Below is a breakdown of steel demand measured in million
 Sector               2018  yr-on-yr
                            pct change%
 Property              388          0.3
 Machinery             138          1.5
 Automobile           59.5          2.6
 Energy               32.5            0
 Shipbuilding         14.5          3.6
 Household              12          2.6
 Rail                  5.1          4.1
 Container             6.4          6.7

 (Reporting by Muyu Xu and Josephine Mason in Beijing, and Ruby
Lian in Shanghai; Editing by Kim Coghill and Richard Pullin)
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