China's steel growth to remain tepid
China's steel industry has entered a phase of slow growth, said a forecast released by the China Metallurgical Industry Planning and Research Institute (CMIPRI) Tuesday, which predicted that both demand and output in the sector will see a growth rate under 4.5 percent in 2013.
The report said that China's total demand for steel products would reach 666 million tons in 2013, up 4.1 percent compared with 2012. But production in 2013 will top 746 million tons, far exceeding demand, said the institute.
An official at the China Iron and Steel Association said earlier this month that major domestic steel makers, which reported combined losses of over 5.5 billion yuan ($883 million) in the first quarters, may stop incurring losses in the fourth quarter as steel prices have rebounded somewhat since September.
"Steel prices are likely to show a moderate increase next year, but not by very much," Li Xinchuang, president of the CMIPRI, told the Global Times at a press conference in Beijing Tuesday.
"We predict that growth in the sector will remain at a low level of 4 to 5 percent in the next few years, and it may stay there for a very long time," Wang Guoqing, research director at the Beijing Lange Steel Information Research Center, told the Global Times Tuesday.
Statistics from Lange showed that growth in the sector has been declining since 2009, when the sector saw fast growth of 13.5 percent.
The report also forecasts that growth in the major industries for steel consumption, such as the automobile, construction, and machinery manufacturing industries, will remain above 4 percent in 2013.
Steel demand in railway construction, in particular, is expected to see a 9.3 percent year-on-year increase in 2013 as the government has sped up investment in railway construction.
The National Development and Reform Commission announced Monday that it has approved a batch of city-rail projects with total investment of 75 billion yuan. Li said the government's new policies to stabilize economic growth have been good news for the steel sector.
The Beijing News reported Monday that the government would launch an initiative to boost mergers and acquisitions in the sector before the end of this year, a move that experts say would help to curb the sector's excessive capacity.
The top 10 companies in the sector only accounted for around 49 percent of total production in 2011, so more mergers and acquisitions are expected given the government has set a target for that number to rise to 60 percent by 2015, according to Wang from Lange.
The Beijing-based metallurgical planning and research body also forecasts that despite growing domestic production of iron ore, China will still need to import over 60 percent of the total iron ore it consumes in 2013.
An official at the China Iron and Steel Association said earlier this month that major domestic steel makers, which reported combined losses of over 5.5 billion yuan ($883 million) in the first quarters, may stop incurring losses in the fourth quarter as steel prices have rebounded somewhat since September.
"Steel prices are likely to show a moderate increase next year, but not by very much," Li Xinchuang, president of the CMIPRI, told the Global Times at a press conference in Beijing Tuesday.
"We predict that growth in the sector will remain at a low level of 4 to 5 percent in the next few years, and it may stay there for a very long time," Wang Guoqing, research director at the Beijing Lange Steel Information Research Center, told the Global Times Tuesday.
Statistics from Lange showed that growth in the sector has been declining since 2009, when the sector saw fast growth of 13.5 percent.
The report also forecasts that growth in the major industries for steel consumption, such as the automobile, construction, and machinery manufacturing industries, will remain above 4 percent in 2013.
Steel demand in railway construction, in particular, is expected to see a 9.3 percent year-on-year increase in 2013 as the government has sped up investment in railway construction.
The National Development and Reform Commission announced Monday that it has approved a batch of city-rail projects with total investment of 75 billion yuan. Li said the government's new policies to stabilize economic growth have been good news for the steel sector.
The Beijing News reported Monday that the government would launch an initiative to boost mergers and acquisitions in the sector before the end of this year, a move that experts say would help to curb the sector's excessive capacity.
The top 10 companies in the sector only accounted for around 49 percent of total production in 2011, so more mergers and acquisitions are expected given the government has set a target for that number to rise to 60 percent by 2015, according to Wang from Lange.
The Beijing-based metallurgical planning and research body also forecasts that despite growing domestic production of iron ore, China will still need to import over 60 percent of the total iron ore it consumes in 2013.
