SHANGHAI, May 19 -- It is reported that China's steel industry is likely to be in red this year as a result of the oversupply in the weak world wide steel market.
Mr Xu Lejiang board chairman of Baosteel pointed that although China steel industry was in hot water at present, Baosteel would not change the regrouping strategies in face of the difficulties.
The domestic steel industry was in a dilemma during January to April. Mr Xu believed it may see a profit loss this year according to the recent economic situation both at home and abroad. The severe steel structure problem has been further worsened in China.
Mr Xu figured out that the global industry has slashed the production at present, and only POSCO gained slight profits, compared with the other steel mills in the world. And 70%-80% production capacities are still existed in China with the inflow of the cheaper imported resources, the industry is unable to catch a 20% developmental speed as before.
He added that some outdated capacities should be washed out from the market competitiveness from the 2005 steel industry policy and steel industry adjustment & revitalization plan. Meanwhile, the government should fully exert its efforts on the restriction of environmental protection and energy savings.
So, China has to continue the merges and consolidations in the following days in a bid to eliminate the inefficient capacities. Baosteel, the largest steelmaker in China, would carry out the restructurings all the way.
Earlier in 2007, Mr Xu has put forward Baosteel 2007 to 2012 development goals, which aims to form 80 million tonnes per year capacity scale by 2012 with sales revenue and total profits hitting at USD 50 billion and USD 5 billion respectively, vaulting into world top 200.