Wednesday, 7 August 2013 00:00
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Reuters: China’s steel output is expected to rise 9% from a year ago to a record high of about 780 million tons in 2013, the country’s economic watchdog said, even as a slower economy points to a modest growth in demand.
China’s legion of steelmakers, which account for nearly half of the world’s output, have been keeping production high to shield their market share in a fragmented industry and maintain credit lines with banks.
But with supply continuing to outpace demand as China’s economic growth slows, it is weighing on steel prices and steelmakers’ balance sheets, with many of them incurring losses. China’s economy has slowed in nine out of the past 10 quarters.
Growth in steel demand in the world’s top producer and consumer would remain weak in the second half, the National Development and Reform Commission (NDRC) said.
“The modest economic growth will not provide much catalyst for steel demand and growth will improve little in the second half, which will keep a lid on prices,” NDRC said in a statement on its website.
The China Iron and Steel Association has said steel demand will likely remain weak for the rest of 2013, after reporting that its members – 86 steel mills – incurred a combined loss of 669 million yuan ($109 million) in June.
In 2012, China’s crude steel production grew 3.1% to 716.5 million tons.
China’s steel exports are expected to jump 10% to 61.5 million tons this year, NDRC said.
