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Chinese top steel maker to cut steel capacity by one-fifth over 3 years

iconApr 11, 2016 17:21
Source:SMM
The Chinese Maanshan Iron and Steel has announced its decision to cut steel capacity by 20% over the next three years.

By  (ScrapMonster Author)

April 11, 2016 03:35:19 AM

BEIJING (Scrap Monster): The Chinese Maanshan Iron and Steel has announced its decision to cut steel capacity by 20% over the next three years. The capacity cut decision is on account of the mounting supply glut concerns and fears of further slowdown in the country’s economic recovery.

According to Qian Haifan, Maanshan’s general manager, the company plans to cut 4.2 million tonnes of steel making capacity over the next three years. It must be noted that the company’s current capacity stands at 22 million tonnes. Meantime, the company plans to expand its overseas business by expanding the number of overseas units to 7 by 2017, from the existing 4 overseas operations. At the same time, the company will continue to export nearly 10%-15% of its production abroad.

Quain further stated that the government measures to protect domestic steel industry from flood of Chinese steel products will impact the imports of products from China. The EU region had announced three anti-dumping investigations into Chinese steel products in February. The yearly exports are likely to witness sharp downfall this year, when compared with the record exports of 112 million tonnes recorded in 2015.

The most recent data released by the China Iron and Steel Association (CISA) indicates that large-scale steel mills in China made a combined loss of 11.4 billion yuan during the initial two-month period of the year. The mills had reported loss in excess of 100 billion yuan during the previous year.

Meantime, CISA noted that controlling steel output is important as steel exports in 2016 are highly likely to fall as governments in foreign markets move to protect their own domestic producers. The crude steel production by the country had declined for the first time in three decades to 804 million tonnes in 2015. The domestic consumption too had dropped 5.4% during the year to nearly 700 million tons.


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