According to the survey published on the website of China Iron and Steel Association, China, the world’s largest steel producer and consumer of steel raw material (coking coal and iron ore), may reduce the production for the first time in 31 years.
According Chinese consulting company Steelinfo, steel production in China this year could reach 678.68 million tonnes – 0.7% less than in 2011, when it was the highest ever: 683.2 million tons. Agency predicts that in the second half, Chinese steelmakers will cut output by about 10% compared with the first.
The fact that in Q2 the economic growth in China was 7.6%, the lowest increase since the financial crisis began in 2008. As a result, futures prices for steel on Shanghai market fell by about 13% since the beginning of the year. According to World Steel Association, global steel demand in 2012 will grow by about 3.6% against 5.6% in 2011.
Global manufacturers have already begun to respond to problems in the industry. The largest producer in the world ArcelorMittal in Q1 has cut production by 2.3% to 21.7 million tons.