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The Ministry of Industry and Information Technology says China's steel manufacturers are facing great challenges, brought by high raw material prices and overcapacity.
Minister Li Yizhong said during an industrial meeting that figures from the first five months of this year, show China produced 270 million tons of steel -- almost 24 percent more than during the same period last year. Despite daily output declining last month, annual steel production is still expected to hit a record high.
Also on the rise is the cost of raw materials. A near 100 percent jump in iron ore prices in major producer countries, has added 600 yuan more to produce every ton of steel. A raft of curbing measures issued by the State Council has cooled the property sector's demand for steel. And prices for steel products have dropped for nine consecutive weeks. Some producers are already reporting losses.
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