China’s steel output to slow down in 2008: official

March 6th, 2008 - 6:25 pm ICT by admin  

Beijing, March 6 (Xinhua) China’s steel output will fall sharply in 2008, despite maintaining the top position as producer and net seller of the strategic product, China Iron and Steel Association (CISA) said. “The crude steel output was expected to grow between 6.3 and 10.4 percent on a year-to-year basis, while rolled steel output was projected to increase between seven and 12.3 percent,” said Qi Xiangdong, CISA director, at an export forum.

By comparison, the outputs of crude and rolled steel increased by 15.66 percent and 22.69 percent, respectively, in 2007, according to a CISA estimate.

Qi attributed the main reason for the slowdown to the rising price of iron ore in the global and domestic markets.

Since China joined the international pricing negotiations in 2004, the price has risen every year.

Baosteel Group, the country’s largest steel maker, agreed last month to raise steel prices for the second quarter of 2008, accepting the Brazilian miner’s price rise that ranged from 65 to 71 percent compared with 2007.

According to Qi, the snow disaster in the country in late January, which disrupted power supply and transport, was partly responsible for the slowdown.

“Steel output was interrupted due to the shortage of electrical power, coal coke and iron ore - the major resources for steel production,” he said.

To protect the environment and achieve energy-saving goals, China eliminated 29.4 million tonnes of outdated iron smelting facilities and 15.21 million tonnes of outdated steel smelting facilities by the end of November.

A total of 344 iron and steel makers in 10 provinces, autonomous regions and municipalities, including Beijing, Hebei, Shanxi, Henan, Jiangsu, Shandong, Zhejiang, Jiangxi and Xinjiang, were closed, according to the National Development and Reform Commission (NDRC).

“On one hand, the outdated production capacity has been eliminated. On the other, the newly-developed capacity has not been fully put into use, leaving a temporary gap between demand and supply,” Qi said.

He estimated that exports of China’s rolled steel might plunge to 17 percent annually, amid a looming trade protective sentiment on the international market.

Last year, the country exported 62.65 million tonnes of rolled steel, a growth of 45.8 percent over the previous year.

However, the growth rate was 63.7 percentage points lower than the previous year.

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