Private firms contributed 40% of China's 45m tonnes of new steel capacity

The China Iron and Steel Association said Monday that 38 steelmaking converters, with output capacity of 45 million tonnes of crude steel, went into production in China last year; 32 of which were newly-built.

Significantly in an industry dominated by large government-run companies, private enterprises put into production 17 of the new facilities representing almost 42% of the added tonnage.

The investments come despite plummeting profitability in the sector and amid constant allegations that China's state-controlled steel industry is not at all exposed to market realities, but is simply used by the communist government as a blunt instrument for economic growth.

China's blast furnaces forge steel at a rate of almost 2m tonnes a day and account for close to half of global output that reached over 1.5bn tonnes last year.

The global iron ore business is dominated by China – the country's blast furnaces consume more than 60% of the more than 1 billion tonnes seaborne iron ore trade.

Iron ore has pulled back from 15-month highs set early January when the commodity came within sight of $160 a tonne.

On Monday Tianjin iron ore was changing hands at $148.40 a tonne – still up an astonishing 70% from its September lows.