China’s crude steel output rise

China's crude steel output rose 13.5 per cent in 2009, official data shows, which analysts say could weaken the position of the nation's steel mills in this year's iron ore contract price negotiations. Production reached 567.8 million tonnes last year, according to figures released by the National Bureau of Statistics on Thursday, partly due to massive public spending on infrastructure projects. Analysts said the figure was a record and may increase pressure on Beijing to accept higher prices for iron ore — the key ingredient used to make steel — during talks with the world's major miners. 'In a situation where the industry is expected to increase output and its demand for iron ore, this impacts the iron ore price talks,' Fitch Ratings analyst Lim Su Aik told AFP. Lim said steel output could reach 600 million tonnes this year. 'The fiscal stimulus policy is still in place and the infrastructure projects are very much driven by government spending and that is one key driver for steel demand,' Lim said. China's iron ore imports surged 41.6 per cent to 627.8 million tonnes in 2009, with the value falling 17.4 per cent as prices were hit by the global downturn, customs data shows.