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China's Crude-Steel Output Declines to Six-Month Low on Overcapacity Cuts |
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administrator |
DATE |
2010-09-13 16:43:38 |
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China's Crude-Steel Output Declines to Six-Month Low on Overcapacity Cuts
Mon. 13 Sep. 2010
Crude steel production in China, the world’s biggest maker of the metal, fell to a six-month low in August as companies sought to cut overcapacity.
Output was 51.64 million metric tons, according to data from the National Bureau of Statistics today. That was the lowest since February and a drop from 51.7 million tons in July, according to data compiled by Bloomberg News.
Chinese steel prices gained an average 5.6 percent in August from July, after steelmakers cut output to trim overcapacity. Production may fall in September as local governments start power restrictions to meet energy efficiency targets, according to Hu Yanping, an analyst at researcher UC361.com.
“The magnitude of China’s steel production cuts is unprecedented, and likely to expand,” Hu said in a Sept. 8 note.
Hebei province, the biggest steel producing region, will demand that Tangshan Iron & Steel Group, Shougang Corp., and other steelmakers curb output to meet energy targets, according to the Tangshan city government website. Provinces including Shandong, Guangxi, Zhejiang and Guangdong have also taken measures to limit power supply, analysts said.
China has cut energy consumption per unit of GDP by 15.6 percent between 2006 to 2010, below its target of a 20 percent reduction, according to JPMorgan Chase & Co. The government has also ordered 2,000 companies, including steelmakers and smelters, to shut obsolete plants by the end of September to curb industry overcapacity.
The August steel production fell 1.1 percent from a year ago, the statistics bureau said.
Source from Bloomberg |
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