BEIJING, July 28 (Xinhua) -- An official with the China Iron and Steel Association (CISA) warned of the potential risks of a surplus in steel production on Friday.

    Luo Bingsheng, executive vice president of the CISA said the key problem is to control the overheating that appears to be emerging in China's steel and iron industry.

    According to statistics released by the CISA , China produced nearly 200 million tons of crude steel in the first half of the year, rising 18.26 percent from the same period of last year.

    The output of pig iron rose 20.85 percent year on year to 193 million tons and rolled steel was up 25.78 percent to 222 million tons.

    In January the daily output of crude iron was 973,500 tons and rose to 1.22 million tons in June. If the second half of the year follows June's trend, China's annual output in 2006 will rise to 424 million tons, up 20.45 percent from that in 2005, said Luo.

    According to statistics of the CISA, the iron and steel industry saw investment in fixed assets rise by 2.3 percent year on year to 99.7 billion yuan in the first six months.

    Data from the National Bureau of Statistics shows that in the first five months of this year China's iron production capacity increased by 7.41 million tons and steel by 12.18 million tons.

    China exported 17.1 million tons of rolled steel in the first six months, up 47.71 percent from the first half of 2005, while the year-on-year growth in May and June is 65.4 percent and 101.3 percent respectively.

    The sharp rise of steel exports increased the possibility of more trade friction, said Luo. Enditem