China: Steel production to fall this year

7 March 2008

Beijing, China, 7 March – Growth of China’s steel production is expected to slow this year according to a statement from the China Iron and Steel Association (CISA) Thursday in Beijing.

Qi Xiangdong, director of CISA, said at a sector meeting that steel production was expected to rise by 6.3 to 10.4 percent and laminated steel production would increase by 7 to 12.3 percent.

Comparatively, raw steel and laminated steel production in 2007 saw growth of 15.66 and 22.69 percent, respectively, according to CISA figures.

Qi said that the main reason for the slowdown in production was the rise in price of iron ore on the international and domestic markets.

Since 2004 China has joined international negotiations to establish iron ore prices and these have seen rises every year.

In 2004, negotiations led to a rise of 18.62 percent, in 2005 the rise was 71.5 percent and in 2006 it was 19 percent.

In the second quarter of 2008, the Baosteel group, China’s largest steel maker, accepted a rise of 65 percent for the price of iron ore proposed by Brazil’s Vale.

Accordingt o Qi, steel production was affected by a fall in supply of electricity, coke and iron ore following snowstorms at the end of January.

In 2007, China’s exported 62.65 million tons of laminated steel, or an annual growth rate of 45.8 percent. (macauhub)