China’s steel industry, the world’s largest, will experience improved operating conditions this quarter and next year after posting nine months of losses, Xinhua news agency said, citing a trade association.
Most large and medium-sized mills reversed losses last month, Xinhua said, citing Liu Zhenjiang (劉振江), vice president of the China Iron and Steel Association (中國鋼鐵協會), at an industry forum on Saturday.
Chinese mills lost 5.5 billion yuan (US$883 million) between January and September, compared with profits of 38.7 billion yuan in the same period of last year, Xinhua said, citing the association’s data.
Liu’s comments add to signs that China’s economy, the world’s second largest, may be stabilizing after a seven-quarter slowdown that curbed growth to 7.4 percent in the three months ending in September.
Steel production capacity must be strictly controlled, Liu said, adding that this year had been the hardest for the country’s mills since the turn of the century.
Economic growth may rebound to 7.7 percent in the final three months of the year, according to the median of estimates of analysts surveyed.
A further acceleration is forecast for the first two quarters of next year, the data shows.
Total crude steel output in China rose 2 percent to 59.1 million tonnes last month from September, the National Bureau of Statistics said on Nov. 13. Compared with a year earlier, output rose 6 percent, it said.
Baoshan Iron and Steel Co (寶山鋼鐵), the nation’s biggest publicly traded mill, said on Nov. 12 that it would raise prices for most cold-rolled products for next month’s deliveries, the first increase for three months.
China’s government approved a US$158 billion subways-to-roads construction plan in September.
While the infrastructure program will boost steel demand in the final quarter, mill overcapacity may limit rises in steel prices, the iron and steel association said on Nov. 14.