Thursday, 03 Feb 2011
According to Macquarie Research, Chinese crude steel output may have been under reported by 13 million tonnes in 2010 by failing to include small steel mills especially in the country's steel heartland of Hebei province.
Macquarie said annual production capacity of 24 million tonnes in the third quarter of last year and 27 million tonnes in the fourth quarter was excluded from full year steel production figures which should have reached 640 million tonnes.
Data from the National Bureau of Statistics showed China produced a record 627 million tonnes of steel last year.
Mr Luo Bingsheng, deputy chairman of the China Iron & Steel Association warned in late October that regional governments and enterprises could be misreporting their output figures.
Macquarie said CISA representing 77 medium and large sized Chinese steel mills said its Hebei based members produced 10.4 million tonnes of crude steel in December but the NBS put the figure at 9.2 million tonnes for the whole province.
Macquarie said "China demand for iron ore is almost 20 million tonnes higher in 2010 than what was implied using the NBS data, adding that this partly contributed to strong iron ore prices over the final quarter of last year.”
Based on its revised figures, Macquarie forecast a modest eight per cent growth in steel production this year, supported by demand from the manufacturing sector, bringing output to 690 million tonnes.(sourced:businessspectator.com.au)
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