China’s cut in global steel production hit a low point, may help the industry recover
China’s official data show that since the beginning of last year, has cut the legitimate steel production capacity of 110 million tons. And in the first half of this year to ban the “land steel” production capacity of 120 million tons, its production cuts eventually led to the current production data began to decline.
According to the British media reported on October 10, sources and experts said that China’s cut production capacity to promote the global steel industry from the downturn caused by overcapacity recovery, but this recovery is facing danger, because the Middle East and Asia, excess capacity continues to increase.
Iran said it was the first time last year to become a net exporter of steel, said the plan to 2025 years to achieve an annual output of 20 million to 25 million tons of steel, equivalent to about one-third of China’s exports this year.
“Frankly speaking, the increase capacity in any region poses a significant risk to future steel pricing and profitability,” said Alistair Ramsey, director of research at Metals Quotes.
Reported that the experts said that in order to meet the demand and sustained profit, the steel industry in the current annual output 1.63 billion tons on the basis of at most 400 million tons of idle capacity. But the global production potential of 2.36 billion tons, the industry idle capacity of about 730 million tons. Nevertheless, the OECD report shows that nearly total 40 million tons of additional capacity may be put into operation from 2017 to 2019, including the Middle East and parts of Asia, additional capacity.
Reported that the report also shows that according to plan may be built during this period the project will increase 54.5 million tons of production capacity, mainly in Asia, there are some in the Middle East, Africa, Russia and Ukraine.