With China's steel industry showing characteristics of oversupply and of weak demand from downstream users even entering the traditional peak season of September, the China Iron and Steel Association (CISA) called on domestic producers to control production and to aim to reduce inventories.
CISA has urged Chinese steelmakers to strictly implement production controls and exercise greater self-discipline in curbing output and reducing inventories, according to a statement posted on its WeChat account on September 15.
The proposal, jointly initiated by 44 of China's major steelmakers, including China Baowu Steel Group, Shougang Group, HBIS, Jiangsu Shagang Group and Angang Group, is the latest effort to control production in China's steel industry.
The domestic steel industry has been facing chronic overcapacity amid the weak real estate industry and slowing infrastructure growth, which have weakened domestic demand. The central government has repeatedly urged steelmakers to end destructive price competition.
Sluggish domestic demand - even in the traditional peak season - and the relatively high inventories in the steel industry have contributed to decreasing steel prices, declines in steelmakers' profitability and pressures on producers' production and operations, according to CISA.
