Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

China's 2017 steel output to rise 3-5 percent despite mill closures - CISA

Published 16/09/2017, 12:25
Updated 16/09/2017, 12:25
© Reuters. FILE PHOTO: A truck drives past rolls of steel inside the China Steel Corporation factory in Kaohsiung

BEIJING (Reuters) - China's steel output is expected to grow 3 percent to 5 percent in 2017 compared with last year, said a trade body official on Saturday, despite the closure of small outdated mills as surging prices prompted larger players to turn out more metal.

The world's largest steel producer will make about 840 million tonnes of crude steel this year, said Qu Xiuli, vice president at China Iron and Steel Association (CISA). Last year, the country produced 808 million tonnes of steel.

Steel output at member steel firms of the association - each with annual capacity of more than 1 million tonnes - rose 6.8 percent in the first seven months this year, while small steel mills saw a 2 percent drop in production from last year.

That comes after Beijing's crackdown that shut 120 million tonnes of low-tech steel capacity in the first half of this year and a continuing series of environmental inspections in an effort to curb pollution.

"The Chinese steel sector is upgrading and the industry concentration ratio is rising," said Qu.

Of the 808 million tonnes of steel produced last year, only about 36 percent was produced by the top 10 largest steel mills in China, and their portion is expected to increase this year.

China has been striving to streamline its heavy industries to reduce debt burdens and produce more high value products.

Export prices for steel products in the first seven months of the year rose 43.3 percent to $686 a tonne compared to the same period last year, according to CISA.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Shanghai benchmark steel rebar prices gained nearly 50 percent this year, hitting a 4-1/2-year peak at 4,194 yuan (£471) a tonne in early September, as the market was boosted by expectations of tight supply due to rigorous capacity cutbacks and the environmental checks.

The price increases have led to booming profits at Chinese steel mills.

"The net profits of Chinese steel firms have raised 390 percent in the first seven months this year to over 70 billion yuan. We expect to see at least 100 billion yuan in profits by the end of this year," said Qu.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.