Angang Steel, mainland's second largest steel maker, expected that the growth in steel demand on the mainland would slow down in the second half of the year due to uncertainties in rising production costs, according to Tang Fuping, the company's vice chairman and general manager.

Domestic steel consumption hit 16.3 percent in the first half of the year, but Fu Jihui, the company's board secretary, said it was expected to ease 13 percent in the second-half.

It is estimated that the company will produce another million tons of iron and steel in the remaining months of this year.

Angang saw a steady growth for the six months ending June 30, 2008, with a net profit of 59 billion yuan, up 24.7 percent compared with 48 billion yuan in the same period of last year.

The company raised 39.8 billion yuan in revenue in the first half of this year, up by 21.4 percent compared with the same period last year.

Its basic earning per share was 0.82 yuan.

With the application of new technologies, Angang managed to offset the skyrocketing material and fuel price, transportation costs and several natural disasters by producing 1662.7 billion tons of new products.

Reduction of production costs was possible because of various measures such as adopting a different market strategy and production management.

Despite the heavy pressure and uncertainties from rising production costs in the domestic market, Angang will strengthen its business capacity and strive for performance excellence in the second half.

Tang said: "The company will be focusing on benchmarking and quality management in the second half of 2008."

Tang also added that the company would continue to strengthen investment management, giving priority to scientific research and development for its new products and implementing energy saving and emission reduction measures to sustain its leading role.

(HK Edition 08/14/2008 page2)