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Chinese steel mills lost USD 10 billion in 2015 - CISA

Add Time:2016-04-11 20:00:00 Clicks:
IB Times reported that China Iron and Steel Association said that China’s steelmakers saw their worst ever loss last year. Losses in primary business rose to USD 15.5 billion, compared to less than USD 1 billion in 2015, while total losses, after investment returns were taken into account, were around USD 10 billion. This compared to an overall industry profit of some USD 3.5 billion in 2014.

Mr Liu Zhenjiang, party chief and secretary general of the China Iron and Steel Association, told an industry meeting in Beijing that there had been some sign of recent improvement, with China's steel price index up some 20 percent over the past three months. But Chinese steel producers still lost some USD 1.75 billion in January and February, and Liu said there was little reason for optimism.

He said "The sharp downturn sent life-or-death signals to some companies and posed grim challenges for our business in 2016.”

Oversupply was still a problem, Liu added, noting there was “a significant chance” that China’s steel exports would continue to drop this year. And he called on steelmakers to “cut capacity, curb output and improve efficiency.”

The Chinese government has pledged to reduce overcapacity in its commodity sector as part of supply side reforms — it recently announced that it would cut crude steel production capacity by 100 million tonnes to 150 million tons over the next five years. One steel-producing province, Hebei, has said it will close 60 percent of its steel mills over the next five years. The government has also said some 500,000 workers will be laid off from the steel industry over the coming years.
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