Output cuts crucial to steel sector recovery, expert suggests

In recent years, China's steel industry has been caught in a vicious cycle of competition, marked by persistent declines in steel prices and shrinking profit margins for domestic mills. Proactive production cuts are likely to be the top strategy for helping the industry emerge from its current difficulties, according to Xu Xiangchun, senior analyst at Mysteel.

Overcapacity remains the root of steel industry's troubles The root cause of Chinese steel sector's ongoing distress is severe overcapacity, driven by a sharp decline in domestic demand and a limited reduction on the supply side. Xu noted that China's domestic steel demand has declined for four consecutive years, reaching approximately