Chinese steel makers may reduce output
Chinese steel makers, the largest producers in the world, may cut output by 20 percent next year even with China’s 4-trillion-yuan (US$586 billion) stimulus plan, Shougang Corp has said.
“The steel market needs time to recover even with the stimulus plan,” Shougang’s Chairman Zhu Jimin said on Monday at a conference. “No one can tell how long it will take at the current stage.”
The Chinese government announced the stimulus plan on Sunday to revive growth in the world’s fourth-largest economy, and will invest in housing, railways, roads and airports. All Chinese steel makers were unprofitable last month, according to the China Iron and Steel Association.
“Demand is slowing, and inventories are piling up,” Helen Wang, a Shanghai-based analyst at DBS Vickers, told Bloomberg News. “Steel producers cutting output reflect expectations of lower demand from end users.”
The global slowdown has damped steel demand from builders and makers of cars and appliances. Steel output in China has gained annually since at least 2000.
China’s steel output may rise only 2.2 percent to about 500 million tons this year, compared with an earlier forecast of 540 million tons, the association said last month.
Still, DBS Vickers’ Wang says a prediction of a 20-percent decline in output next year may be “exaggerated.”
Tags: CISA, output, Shougang, steel, steel-maker