CISA: China’s steel industry comes under pressure in first quarter

Monday, 01 April 2019 14:30:55 (GMT+3)   |   Shanghai

Liu Zhenjiang, secretary general of China Iron and Steel Association (CISA), has stated at China Steel Planning Forum held in Beijing that China’s steel industry has come under pressure in the first quarter of the current year.

Mr. Liu indicated that China’s crude steel output rose by nine percent in the first quarter, with this output accounting for 52 percent of global crude steel output, creating the new high in history.

However, in the January-February period of the year, iron ore prices in China moved at a high level, resulting in a 38 percent year-on-year decline in Chinese steelmakers’ profitability. The average profit margin of Chinese steel mills in the first two months of the year decreased to 3.5 percent from 6.9 percent in the same period of 2018. Furthermore, around one quarter of all steelmakers in China posted losses for the first two months of the year, the CISA official stated.

Mr. Liu went on to say, “Although we have realized that China’s steel mills are unable to achieve profits as good as last year, the steady operation of the overall steel industry is what we expect in 2019.” He added that, accordingly, steelmakers in China should control their capacity utilization rates in order to avoid strong pressure from the supply side.

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