Under the circumstances of the downward pressure on the domestic economy, it is difficult to increase demand to resolve the glut in the steel sector. Therefore, "production control" remains a key to resolve the problems for the domestic steel industry, said Zhu Jimin, vice president of the China Iron and Steel Association (CISA) at a recent forum.
At present, demands for steels in the domestic market have peaked and the steel industry has entered a new round of adjustment, Zhu added.
The following table shows the steel production in China in the first three quarters of 2015.
|
Item |
Jan.-Sept. output (tonnes) |
Change on year (percent) |
|
Crude steel |
608.94 million |
Down 2.1 |
|
Pig iron |
528.38 million |
Down 3.3 |
|
Steel products |
840.24 million |
Up 1.1 |
(Source: National Bureau of Statistics)
In 2013, apparent consumption of the crude steel in China increased 7.1 percent year on year, while that in 2014 was down 3.29 percent year on year. In the first eight months of 2015, the apparent consumption went down 5.49 percent year on year, data showed.
The sharp increase in steel demand has become a thing of the past. In the coming years, the crude steel apparent consumption will fluctuate in a range and the slight increase and fall will be normal. But, do not pin your hopes on the significant steel consumption to resolve the current problems in the steel industry, said Zhu.
The CISA data showed that the steel composite price index was 99.14 at the beginning of 2014 and fell by 16.2 percent to 83.09 at the end of the year. Entering 2015, the downtrend continued and fell to 60.71 at the end of September 2015.
Meanwhile, in the first eight months of 2015, the large and medium-sized steel mills saw their sales revenue stand at 2 trillion yuan, down 18.3 percent year on year and incurred losses of 18.032 billion yuan, the CISA data showed.
It is worth noting that those steel mills incurred a loss of 43.658 billion yuan in their main business during the period.
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