News of China Steel Market

According to Mr Zheng Qilin the secretary of China Iron and Steel Association and the GM of Wuhan Iron & Steel Corp the steel price in Jan and Feb witnessed an increase from that of last December slightly eased the pressure for the steelmakers.Mr Zheng said "However, the future steel market would see more pressure and uncertainties as small and medium mills resume their productions."Mr Zheng said the recovery of China steel market would largely lie on how long the crisis will last, the trend of China economy, the output of steel mills, the price of iron ore as well as the competitiveness of the steelmakers.To tackle the industry overall supply glut, Mr Qilin said that “M&A among the steelmakers should be accelerated. The top ten steel mills in China take merely 36% of the national steel output, far lower than that of other countries. He also believes that the government should hammer out more policies to support the development of steel industry, such as the tax rebate.”According to the statistic of CISA, most of the large scale steelmakers were able to cover the cost or made slight profit in January, but small and medium mills still were bearing losses, given the financial crisis needs more time to see the end and mills' production resumption.Amid the sharp price drop last year, many mills cut or halted their productions to survive the turmoil. However, they resume productions gradually and bring much pressure to the market again.In February the average output of crude steel reached 1.42 million tonnes up 0.09 million tonnes from that of 1.33 million tonnes in January.(Sourced from.Mysteel.net)