CHINESE steel makers are cutting output because of weaker demand and higher raw-material costs, according to Nanjing Iron and Steel United Co.

    Production was reduced by 10 percent from August, Yang Siming, general manager of the Jiangsu-based company, said at a steel conference in Xiamen yesterday.

    "A lot of steel makers were making losses from August," Yang said. "Small mills were forced to close, with bigger ones reducing output."Contract iron ore prices have gained as much as 97 percent and coking coal more than doubled for Chinese mills.

    Nanjing Steel buys two-thirds of the iron ore it needs through long-term contracts, Yang said.

    China's prices of hot-rolled coil, a benchmark product, fell 13 percent to 5,163 yuan (US$755) a ton yesterday from 5,957 yuan on June 5.

    Xinyu Iron and Steel Co, a Jiangsu Province-based steel maker, is bringing forward annual maintenance of its plants because of slowing demand, Chairman Xiong Xiaoxing said at the conference.

    Nanjing Steel United plans to build a mill in Lianyungang port, Jiangsu Province, Yang said.

    Nanjing needs to close 2 million tons of obsolete capacity and buy other rivals to help win government approval, he said.

    Xinyu Steel is building a 3-million-ton-a-year plant.