(Yicai) Jan. 20 -- The explosion at the factory of Chinese iron and steel producer Inner Mongolia Baotou Steel Union has killed nine people, with one still missing, according to Xinhua News Agency.

The blast, originating from a 650-cubic-meter saturated water and steam spherical tank, occurred at a plant mainly producing rare earth steel, a rare type of new steel, in China's northern Inner Mongolia Autonomous Region on Jan. 18, Xinhua reported today. Some 84 people were hospitalized following the incident.

After the accident, Baotou Steel activated an emergency plan to search and rescue the missing, help the injured, deal with the aftermath, and cooperate in the investigation, it said yesterday. Some facilities and equipment were damaged from the blast, which will impact related production lines, with detailed losses still under assessment, it added.

Rare earth steel is a special type of steel where rare earth elements such as lanthanum and cerium are added during the steelmaking process to make it more corrosion-resistant, hard-wearing, and stronger in mechanical properties. It is widely used in high-speed rail tracks, wind power equipment, and marine engineering equipment.

There are not many Chinese rare earth steel manufacturers, Ge Xin, deputy director of the Research Center of LangSteel.Com, told Yicai. HBIS Group and Citic Pacific Special Steel Group are two others besides Baotou Steel, but have a smaller output, Ge noted.

The accident will trigger major safety inspections in the steel industry, which may lead to a reduction in the rate of operating production capacity and even affect the output of coking coal and thus lead to rising steel prices in the short term, according to Ge.

However, the Chinese steel market will still primarily be affected by the decline in the real estate market and the slump in exports this year, Ge said, adding that steel prices will likely continue last year's downward trend, but with a smaller decline.

Baotou Steel mainly produces special and rare earth steel, selling 5.4 million tons of the former and 1 million tons of the latter in the first half of last year, according to its financial report. Its net profit jumped 40 percent to CNY151 million (USD21.7 million) in the period from a year earlier, but revenue fell 11 percent to CNY31.3 billion (USD4.5 billion).

Shares of Baotou Steel [SHA: 600010] ended unchanged at CNY2.37 (34 US cents) apiece in Shanghai today, after closing 5.2 percent lower yesterday.

Editors: Dou Shicong, Martin Kadiev