Wednesday, 04 November 2015 15:53
SHANGHAI: China’s output of crude steel is expected to fall to 780 million tonnes by 2020, the China Iron & Steel Association (CISA) said on Wednesday, as the steel sector grapples with slower demand growth and tumbling prices. China’s crude steel production will fall this year and the next, with a brief rebound in 2017 before resuming its downward trend, CISA told an industry conference in Beijing.
With steel prices hitting their lowest in more than two decades, the country’s massive steel sector is struggling with surplus capacity of about 300 million tonnes and cooling demand growth.
However, top iron ore miners, including Rio Tinto and BHP Billiton , are still expanding output, betting on sustainable growth in China, despite the contraction in steel output by the world’s biggest producer.
BHP sees moderate but sustainable growth in Chinese steel production over the next decade, although it cut its forecast for peak steel production to between 935 million and 985 million tonnes in the mid-2020s, down from 1 billion tonnes previously.
Shrinking demand, soaring losses and tighter credit have undermined Chinese steel firms, with more, particularly in the northern region, expected to make deeper output cuts over the next few months.
Anshan Iron & Steel Group, one of China’s major state-owned steel firms, has suspended operations at some blast furnaces this week, industry sources said.
China’s apparent crude steel consumption fell in 2014 for the first time in three decades, to stand down 3.4 percent at 738.3 million tonnes. Consumption for the first nine months of this year dropped 5.8 percent to 533 million tonnes.
China’s economic growth between July and September dipped below 7 percent for the first time since the global financial crisis, hurt partly by slowing investment, but President Xi Jinping has said the country can maintain annual economic growth of around 7 percent over the next five years.
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