In the first quarter of 2009, China's 72 large and medium steel mills registered an overall loss of RMB 3.308 billion ($485 million). The mill's combined loss for the first two months of this year totaled RMB 1.511 billion ($221 million), before escalating to RMB 1.797 billion ($264 million) for March alone. Of the mills in question, 20 are currently in the red.
Excessive steel production is the root reason for the excessive market supply and the losses suffered by the mills. In the first three months of this year, China's crude steel production amounted to 127.4435 million mt, up 1.7492 million mt or 1.4 percent year on year. Average daily production during the period reached 1.416 million mt, which is equivalent to an annual output of 517 million mt, far above the 2009 target level of 460 million mt.