Stecher and Williams proposed the formation of interstellar H2 by chemical-exchange reactions on graphite grains. The fraction of hydrogen atoms converted to molecules, f, is computed according to their theory, but taking into account the radiative cooling by the molecules. During each cloud collision, f increases according to A J2 < 3 X 1 thereafter the temperature drops so as to stop further thermal reactions. Additional reactions on fast grains produce another increase Af < O.4p (grains)/p (atoms). If H2 is formed by chemical-exchange reactions, its abundance in typical clouds is less than 10 per cent. f The main body of this paper concerns the structure of the shocks in which the molecules form during cloud collisions. They are "isothermal" shocks whose "front" itself consists of an adiabatic shock and a region in which H2 both forms and radiates.