China's raw material industry reports increase in value added

China's raw material industry value added increased 13 percent year on year in July, two percentage points higher than the growth in June, according to statistics of the Ministry of Industry and Information.

In the first seven months of this year, the raw material industry's value added grew 7.8 percent year on year, compared to the 6.9 percent registered in the first half.

Among the industry's various sectors, metallurgy quickly fired back into shape with its value added rising 14 percent year on year in July. This marked a 5.6 percentage point improvement from that of June.

In terms of specific products, crude steel output amounted to 50.68 million tons, up 12.6 percent year on year. The daily output averaged at 1.64 million tons.

The output of steel products reached 60.91 million tons in July, up 19.4 percent year on year.

Within the year's first seven months, the output of crude steel and steel products recorded 317.31 million tons and 377.84 million tons, respectively, up 2.9 percent and 7.6 percent.

In terms of foreign trade, steel products had suffered declining exports, but were able to enjoy higher imports.

In July, China exported 1.81 million tons of steel, down 74.9 percent year on year in crude steel equivalence. It imported 1.74 million tons of steel and 570,000 tons of billet, up 57.2 percent year on year in crude steel equivalence.

In the first seven months of this year, China imported 11.16 million tons of steel and 10,000 tons of billet, down 67.6 percent year on year equivalent to 11.88 million tons of crude steel. The import volume of steel and billet stacked up to 9.88 million and 3.23 million tons, respectively, up 31.3 percent equivalent to 13.74 million tons of crude steel.

Steel inventories began rising in July after falling month on month since March, as statistics from China Iron and Steel Association show. At the end of July, the inventories of five key steel products in 26 major cities reached 9.44 million tons, up 480,000 tons, or 5.4 percent, month on month.

The inventories of steel wire accumulated the highest gain of 14.5 percent month on month, while that of hot rolling and deformed steel bars edged up 7.1 percent and 5.4 percent, respectively.

Steel prices on the domestic market rose rapidly. The steel aggregate price index hit 110.15 at the end of July, driving back up 15.14 points, or 15.9 percent, from the bottom of 2009. The prices of 6.5mm carbon steel wire rods, 10mm medium plates, 0.5mm hot rolled sheet and 0.5mm cold rolled sheet amounted to 4,073 yuan/ton, 4,073 yuan/ton, 4,419 yuan/ton and 5,373 yuan/ton, respectively, up 10.9 percent, 9.2 percent, 3.5 percent and 10.3 percent over the previous month.

In addition, imports of iron ore sand continued to soar. Customs statistics show that China imported 58.08 million tons of iron ore sand in July, up 46.8 percent year on year and 5 percent month on month. In the January to July period, the imported volume accumulated to 360 million tons, up 31.8 percent year on year. The bountiful importation led to an overstock in ports, casting a negative influence on the market's production and distribution orders.

Meanwhile, iron ore fines increased. On July 31, Indian iron ore fines at the Port of Qingdao increased 130 yuan/ton month on month to 780 yuan/ton.