China steel output seen up 2-3 pct to 800 mln T in 2014 - industry

BEIJING, Dec 22 (Reuters) - China's total crude steel output is likely to increase to 800 million tonnes in 2014 but growth will slow to 2 to 3 percent on the year, the head of its steel association said, with the government trying to tackle over capacity.

China imports about two thirds of global seaborne iron ore supplies and big mining firms like Rio Tinto (Xetra: 855018 - news) have banked on rising demand from the world's biggest steel producer to justify their own big expansion plans.

But Beijing has drawn up a series of guidelines aimed at tackling a huge domestic steel surplus that has inflated global iron ore prices and eroded margins on the domestic market, causing hundreds of firms to suffer losses. Next (Other OTC: NXGPF - news) year's growth rate is already expected to be much slower than 2013.

Zhang Changfu, secretary-general of the China Iron and Steel Association, said total crude steel output was likely to end this year at 782 million tonnes, up 9 percent from 2012, according to a report by the official Xinhua news agency.

Total (NYSE: TOT - news) output over the first 11 months of the year hit 712.8 million tonnes, up 7.8 percent on the year, China's iron ore imports rose 10.9 percent over the same period to reach 746.1 million tonnes.

The government issued policies in October to try to rein in its bloated steel industry, vowing to bring market discipline and tougher technological and environmental standards to a sector cosseted by years of soft loans and local government protectionism.