BEIJING: China, the world's top maker and consumer of steel, expects crude steel output in 2009 to exceed the total for last year, despite efforts to cut production amid falling demand, state media said on Sunday.

Crude steel output in 2009 would "surely" top the 500.48 million tonnes produced in 2008, the official Xinhua news agency said, citing Luo Bingsheng, vice chairman of the China Iron and Steel Association.

In the first half of 2009, China produced 266.6 million tonnes of crude steel, up 1.23 percent over the same period last year, the agency reported.

This comes despite signs that the steel sector is suffering from a fall in demand as a result of the global financial crisis.

China's 71 largest steel producers saw revenue drop 28.1 percent year-on-year to 955 billion yuan (140 billion dollars) in the first half of 2009, while profits were nearly cut in half to 1.7 billion yuan, Xinhua said.

The forecast for 2009 comes despite a call by the government in May for banks to curb loans to steel makers to persuade them to reduce production.

The government order, which was not released publicly, also called on banks to curb or cut off loans to mills with outdated technology, state media reported in May.

The World Steel Association has forecast China's steel demand is likely to fall five percent in 2009.

It would be the first fall since 1995, when demand tumbled 17.2 percent after a real estate bubble burst, according to the steel association.