The Chinese steel production surged in May 2009, although other industrial sectors heavily battered by the global crisis, owing to rise in demand and economic recovery.
While many industrial sectors are badly hit by the ongoing global economic crisis, the Chinese steel industry is still positive and greatly benefitted from the stimulus package given by the government, as reported by NWI.
According to the World Steel Association, the crude steel production in China nearly accounted for half of the world's total steel production in May 2009. Moreover, China was one of the few countries that raised their steel production from May 2008 to May 2009.
In 2008, China alone produced steel more than the combined production of top seven steel producers (including the United States), said the Association in its annual report. Crude steel production in the country soared to 500.5 Million Tons in 2008, an increase of 1.1% from 2007.
As per RNCOS new research report, "China Steel Industry Forecast till 2012", the prime reason for upsurge in steel production is the fast growth rate in production as well as consumption. China is the world's largest steel consumer and has extended its production capacity to meet scaling demand in the backdrop of rapid economic growth.
The China Iron and Steel Association (CISA) have said that the steel industry witnessed its first profit of the present year in June 2009 on account of stabilizing steel prices and rising demand. The industry had posted overall losses in the initial five months of the current year but some industry experts believe that it has started to show signs of recovery.
The Chinese steel industry has expressed willingness to accept term iron ore prices from global miners slightly lower than offered to the Japanese steel factories, according to an industry source.
The statement has confirmed media reports about change in China's stand to cut steel prices drastically. This has come after the failure of the country to reach consensus with international miners on June 30, 2008, indicating to a possible compromise to salvage annual pricing system.
According to a Senior Research Analyst at RNCOS, "The long term growth prospects of Chinese steel industry are very bright but steel producers could not forget the turbulence of last year. 2009 is expected to be a difficult year for the industry in terms of profitability and industry consolidation in the global market. However, the industry will continue to raise its production capacity."
Related Market Research Reports:
Indian Steel Industry Outlook to 2012
US Steel Industry Outlook
China Aluminium Market Analysis
