The Chinese steel industry is struggling to stay afloat

Despite destabilizing factors such as US-imposed protectionism, excess capacity and reduced profits, the Chinese steel industry is finding ways to stay afloat.

China’s iron ore and steel industry has reached a crossroads. After being on the wave of growth in exports for more than two decades, as well as on the boom registered on the domestic housing market.

The Chinese steel industry is facing various challenges

Now the industry is facing multiple challenges. Chinese officials have stated that the country will continue to reduce excess capacity and readjust the industry’s production structures. All this to help both domestic and foreign steel producers. Despite an increase in prices in the last two months.

Shen Danyang, the spokesman of the Ministry of Commerce, said that this sudden increase was caused by the increase in prices for iron ore worldwide. Growing activity in the infrastructure sector is also increasing both domestic and foreign demand for steel products.

His explanation came after the international press reported that worldwide steel prices have increased. On average, from $305 per metric ton at the beginning of this year to $365 in April. Because China has reduced between 150 and 200 million tons of steel and iron production capacity to address the problem of excess capacity.

China is a major importer/exporter of steel

„China is an important exporter of steel and a large importer of special steel. Being used for the construction of ships, weapons and machinery manufacturing. However, on average, import prices are three times higher than export prices. ” said Zhao Ying, a researcher at the Institute of Industrial Economics of the Chinese Academy of Social Sciences in Beijing.

Sun Jin, director of communications at Wuhan Iron and Steel (Group) Co, one of China’s largest iron producers by capacity, said that even though the company announced two months ago that it would cut up to 50,000 of jobs, there have been no layoffs or salary cuts yet.

According to the China Iron and Steel Industry Association, 77.8 million metric tons of crude steel have been reduced nationally since 2011, with further reductions expected.

Article source: http://www.hellenicshippingnews.com/chinas-iron-ore-and-steel-industry-still-in-the-furnace-but-escaping-meltdown/

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