According to Mr Wu Xichun counselor of China Iron & Steel Association, China steel market would be mired in difficulties in the last quarter of this year and the next year.
He said that "The massive overcapacity would worsen, along with the low overseas demand due to global financial storm." Mr Wu said on the 4th Chinese Steel Traders Forum said that total investment in steel projects under construction still hit as high as CNY 340 billion this year though investment growth in the sector fell to 3% from last year 23% which would result in at least 50 million tonnes new capacity in 2010 and send China total capacity up to 710 million tonnes.
He said that demand cannot maintain the same growth with mounting up supplies. Steel consumptions in January to August 2009 increase by 53.51 million tonnes or 16.8%YoY from a year ago.
However, it was mostly driven by numerous infrastructure projects boosted by government stimulus a temporary demand support. And steel demand cannot sustain the high growth in January to August as the government led investment is slowing down.
GBG Price at posting:
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