Thursday, 23 Apr 2009
According to Mr Luo Binsheng vice president of China Iron & Steel Association, in the just passed March, China's steel industry eyed an even larger loss than that of January and February the industry's overall deficit situation sees no change.

It is said in March, the total output of crude steel posted at 42.08 million tons up by 4.11%MoM equaling to 505 million tons a year. Mr Luo said the downstream industries' soft demand sees no change and still is lingering in the low level, therefore, steel mills should be much caution about the future market.

Mr Yang Siming the Chairman of Nanjing Steel said "Steel mills are unlikely to see profit this year as the overcapacity is severe. In March, most of mills were suffering the losses and only few of them saw small profit. Meanwhile, the shrinking export market further depresses the mills' profit situation. In March, China became the steel net importer for the first time since 2004, the accumulative steel export in Jan and Feb accounts for only 4.52% of crude steel produced during the same time, largely less than the export target of 8%.”

Mr Luo believes the weakening demand, international protectionism, exchange rate fluctuations and export duty are the main reasons dragged down the export. He said it is necessary to adjust the export duty for HR sheet rail steel as well as other tax policy.

Though, steel mills are suffering great losses, they are, on the other hand, running their capacity actively. In the industry revitalization plan released earlier this year, the prediction of crude steel output was 460 million tonnes in 2009, however, according to the production data of January and February the output would reach over 500 million tons.

Statistics show social inventory has increased following the output escalation. During the January and February the total crude steel output jumped 2.17 million tonnes from the same period of last year, while that of social inventory climbed 3.75 million tonnes.

(Sourced from.Mysteel.net)