FACED with a large inventory and fewer orders, Maanshan Iron & Steel Co (Magang) has halted production at one of its steel lines this month. The production line would be suspended for at least one month, or until the company received new orders, said Li Zongbi, the H-share company's general manager said at a conference in Qingdao. In the meantime, the workers on the production line will perform maintenance work and attend classes. Mr Li said Magang's steel production dropped 6.9 per cent in the first quarter of this year due to a slowdown in the number of orders. Steel production has dropped three million tonnes for the nation and 50,000 tonnes at Magang. Mr Li predicted that steel production would increase in the second half of this year because China had declared it would restrict imports to 10 million tonnes, down from 22 million tonnes last year. Mr Li said the decline in production of steel would be partially offset by an increase in exports of steel blooms. Although austerity measures and a rapid drop in the price of steel have squeezed the profit margin of steel blooms, the product earns more than ordinary steel products. Mr Li expected foreign exchange earnings from exports to almost double to between 70 million yuan (about HK$65.17 million) and 100 million yuan. Exports would account for about 10 per cent of turnover this year, up from 4.6 per cent last year. Magang sold 40,000 tonnes of steel in the first quarter of this year.