CONF: China's steel output to hover at peak volume
Source: Mysteel
May 24, 2018 20:21
China’s steel output will be hovering at the peak volume with modest changes annually for the next few years, Liu Zhenjiang, Secretary General of the China Iron & Steel Association (CISA) said at the Singapore Iron Ore Forum on May 24.
“So far in 2018, China’s economic performance has been steady and healthy, which will guarantee a stable demand for steel, enabling the Chinese steel industry to work towards high-quality development in the coming years,” Liu said, adding that stable steel demand will lead to steady steel output, and the latter, thus, will be hovering the present peak volume with moderate changes.
In 2017, China’s steel output reached 832 million tonnes, or up 3% on year, and “the steel industry has been operating steadily and smoothly, with the output up 5% on year to 212 million tonnes for Q1”, he commented, without specifying China’s steel output in 2018.
Luis Oganes, Managing Director, Head of Currencies, Commodities and Emerging Markets Research, J.P. Morgan expected China’s steel output to reach 866 million tonnes, up from the original projection at 830 million tonnes, as “China had a stronger start to the year than expected”.
Liu did not dismiss the possibility completely, though he believes that China’s steel mills will definitely closely monitor the market situation before going for substantial production increases.
“If oversupply re-emerge in China’s steel market again, the good days since 2016 will be gone, and I do not think that is what the Chinese steel mills would like to experience again,” he commented on the sideline of the conference.
The Year 2015 has so far been the “coldest winter” for the Chinese steel mills, when most of the steel mills faced catastrophic lossmaking, Liu commented.
At the event, Liu highlighted that “China has contributed greatly to easing the oversupply in the global steel market” by having removed 120 million tonnes/year of excess steel capacity in 2016-2017 and another 30 million t/y as the target for 2018.
“China has made great sacrifices by doing so, and it is unreasonable and irrational to still accuse China of oversupply in the global steel market, whichever country brings up the topic, it needs to reflect how much steel output it has cut domestically,” he said.
Written by Hongmei Li, li.hongmei@mysteel.com
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