Taipei, Sept. 9 (CNA) The production value of Taiwan's steel sector grew about 30 percent in the first half of the year from the same period in 2016, as prices climbed higher, according to the Ministry of Economic Affairs (MOEA).

The ministry said the steel industry's output for 2017 is expected to reach NT$1 trillion (US$33.33 billion) for the first time in three years, riding the wave of higher prices.

Steel demand from shipbuilders, metal product makers, and machinery, auto/motorbike and home appliance suppliers is likely to grow as they seek to fill increasing orders, the ministry said.

Taiwan's steel output fell in 2015 to NT$958.3 billion and in 2016 to NT$913.6 billion due to a global supply glut, after hitting NT$1.27 trillion in 2014.

In the first six months of 2017, however, output jumped 30 percent year-on-year to NT$559.1 billion, as steel prices climbed amid a global economic recovery, the MOEA said.

Meanwhile, Taiwan's steel exports grew 30.2 percent in the first seven months of the year to US$5.5 billion, with China absorbing 13 percent to remain the biggest market, followed by the United States (12.3 percent), Japan (8.3 percent) and Vietnam (8.1 percent), the MOEA said.

Exports to those markets during the seven-month period showed double digit growth, with the U.S. market recording the highest growth of 42.3 percent from a year earlier, according to the MOEA.

In terms of steel imports, China, Japan, Russia and South Korea were Taiwan's top suppliers, accounting for 26.4 percent, 24.6 percent, 6.8 percent, and 6.2 percent, respectively, of the total US$4.7 billion, the MOEA said.

Taiwan Ratings analyst Anne Kuo said in report that China is expected to further cut its steel supply, which would continue to prop up prices and benefit Taiwan's steel sector.

A decision by China Steel Corp., the biggest steelmaker in Taiwan, to raise its wholesale product prices in the fourth quarter was a good indicator of the industry's growing strength, Kuo said.

She said the regional steel industry was likely to continue to grow over the next few quarters, which would benefit Taiwanese producers.

"We expect the sector's credit outlook to improve further over the coming quarters, especially in light of the supply-side reforms in China," Kuo said. "However, the extent of improvement depends on the sustainability of the Chinese government's efforts to eliminate excess capacity."