Chinese Steel Makers Face Grave Situation, MIIT

BEIJING, July 2 -- Chinese steel makers are still confronted by a grave situation of sluggish external demand and quickly climbing capacity, the Ministry of Industry and Information Technology (MIIT) said in a report released Tuesday.

    Despite the positive indications of rising demand and falling inventories in May, China's steel market is still under great pressure from a relatively high level of production, the report said.

    Some products, especially hot rolled strips and thick plates, have been clearly oversupplied, it noted.

    While the demand for deformed steel and steel wire has been driven up by investment, the market is also likely to have excessive capacity as mid- and small-sized steel plants resume and expand production.

    And the impact of foreign market can't be ignored, the report said, concerned about sharp declines in exports and soaring imports.

    It calls on domestic producers to phase out outdated capacity and match production with current market demand.

    (Source: chinamining.org)