Growth in China's industrial output decelerates in June

Growth in China’s industrial output decelerates in June

The growth rate in China's industrial output slowed down to 16.2% in June from a year earlier, after climbing 17.5% in May. The National Bureau of Statistics said that industrial output amounted to Yuan 460.8 billion (approx. $55.7 billion) in the mentioned period. This figure, by showing that Chinese efforts to cool the world's seventh-largest economy are working, reduces the pressure on the central bank to raise interest rates for the first time in nine years. However, electricity output rose by 15.8% in the first half of the year. This denotes that investment activity and the growth in demand are still too high. In the first six months of the year, industrial output reached Yuan 2.5 trillion, up by 17.7% compared to the same period of last year. The growth rate was 18.5% in the first five months of the year. Growth in output of cement and steel, sectors targeted by the government to control investment, indicated a significant slowdown in June. Cement output rose by 13.2% year-on-year, but the growth rate was 3.9% points lower than the year-on-year growth in May. Steel products output surged by 17.3%, but it is also 3.3% points lower than the previous month. On the other hand, power shortages are still a problem. China's stainless steel plants maybe forced to reduce production due to power shortage. Ningbo Baoxin Stainless Steel Co.and Zhangjiagang Posco Co. could have to cut the monthly production to 12'000 mts and 25'000 mts in the coming months.