Chinese steel production will be generally on a downtrend for a relatively long period, as both production and consumption of steel have entered the peak zone, said an official with China Iron and Steel Association (CISA).
Currently, many steel mills undersell products due to oversupply and sluggish demand. Such disordered competition is spreading to high-end steel products from low-end ones, said Zhu Jimin, vice chairman of CISA.
Some local governments require the loss-making steel mills maintain production considering local GDP and social stability, although the mills actually intend to shut down, a report from the CISA showed.
It is essential to find a way for the zombie mills to quit market, CISA officials said. Currently, about 47 percent of the member steel mills of CISA are in the red.
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