chinese steelmakers begin to cut output

September 04, 2008


Chinese steel makers begin to cut output amid weak demand
Bloomberg reported that Jiangsu based Nanjing Iron & Steel United Co has cut production by 10% for August because of weaker demand and higher raw material costs.

Mr Yang Siming GM of the Nanjing on the side lines of a steel conference in Xiamen told reporters that its competitors are also cutting output. Mr Siming said “A lot of steelmakers were making losses from August. Small mills are forced to close, with bigger ones reducing output.''

He warned that “Iron ore buyers should be careful about building up their stockpiles' as steelmakers demand slow. Ore prices may fall this year. Coking coal prices may follow suit from October.''

Mr Xiong Xiaoxing chairman of Jiangsu province based Xinyu Iron & Steel Co said that it will bring forward annual maintenance of its plants because of slowing demand. He added that “The market correction would not finish in two or three months. It may take a few years.''

China's steel prices are heading for a seventh straight week of decline on concern slowing economic growth would hurt demand. Prices of iron ore and coking coal, used in steelmaking, surged to records earlier this year in China.