Strong demand in both domestic and overseas market is the major force driving domestic output up, said Luo Bingsheng, vice chairman of the CSIA.

China's apparent consumption of crude steel rose by 10.5 percent year on year to 287.25 million tons in the first nine months, statistics of the CSIA shows.

However, Luo warned that overproduction still exists in China's iron and steel industry, especially in those plants that consume high amounts of energy consumption and cause serious pollution.

By August of this year, China's iron smelting production capacity increased by 6.47 million tons, its steel making capacity was up 3.6 million tons, hot rolling steel capacity increased by 12.8 million tons, and cold rolling capacity jumped 2.7 million tons, according to Luo.

Currently there are 2,074 projects under construction for the whole industry, he said. According to statistics of the CSIA, China produced 339 million tons of steel products in the first three quarters, up 23.66 percent from the same period of last year.

Fixed asset investment in the iron and steel industry in the first three quarters of the year was 180.3 billion yuan (22.5 billion US dollars), up 4.1 percent year on year.

The growth in the first two quarters is 2.3 percent.

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