Lu Chunning, president of Guangxi Province-based Chinese steelmaker Liuzhou Iron and Steel Co., Ltd, has stated that the business situation in the steel industry will remain relatively severe in the near future, though the industry may have some structural opportunities. Due to the current weak demand from downstream users and increased competition among steelmakers, Mr. Lu said he thinks steel prices may come under downward pressure in the coming period.
According to the production plan set by Liuzhou Steel at the beginning of the current year, its annual outputs of pig iron, crude steel and finished steel are expected to reach 18.9 million mt, 22.7 million mt and 17.81 million mt.
However, Xiong Xiaoming, general manager of Liuzhou Steel, stated, “The company will likely adjust production and management based on the market situation”.
For instance, Liuzhou Steel has kept low inventories of raw materials, including coking coal and coke, aiming to lower purchase and production costs. Since late March this year, coking coal and coke prices in the Chinese domestic market have continued their downtrend, while steelmakers’ low inventory strategy could help avoid the potential losses amid the decreases in raw material prices.
