Shougang Corp., the only Beijing-based steelmaker, started production on May 10 at a 6.4 billion yuan ($916 million) plant on the outskirts of China's capital to meet rising demand from auto and appliance makers.

The plant is able to make 800,000 metric tons of cold-rolled coil and 700,000 tons of zinc-galvanized sheets a year, Shougang said today in an e-mailed statement.

Shougang is building another 67.7 billion yuan steel venture in nearby Hebei province to move its major operation outside Beijing as the capital city prepares for the Olympics. The cold- rolling plant in Shunyi, Beijing, is less polluting than a blast- furnace, the company said.

China's domestic demand for cold-rolled coil, used as outer sheets for auto parts and appliance, may rise to 84 million metric tons in 2010 from 28.5 million tons in 2006, Shougang said in the statement. There will be a supply shortage of 10 million tons in 2010, it said.