International Steel Mills
Baosteel: China Prices to Fall in H2 Due to Oversupply
Written by Sandy Williams
August 28, 2013
Oversupply is likely to weaken China steel prices in the second half of 2013 said Baosteel General Manger Dai Zhihao to analysts on Monday.
Profit margins have fallen in China with Baosteel reporting a 61.47 percent year over year drop in earnings for the first half of 2013.
Overcapacity of nearly 300 million surplus tonnes in China is overpowering steel demand and limiting economic recovery for the industry. Supply is expected to continue to outpace steel demand in the months ahead.
“The rebound is lacking in strength to be sustained in the near term, and steel prices will be volatile in the second half and weaker than the first half due to uncertainties in demand and oversupply,” said Dai.
Iron ore prices are expected to rise faster than steel prices in China and cut into profits for the third quarter.
The supply glut has Beijing instituting credit measures to limit credit access to the sector. Baosteel has no plans for mergers or acquisitions for its steel business in the coming years but instead will try to increase its non-steelmaking businesses to as much as 50 percent of company profits.
Baosteel currently has a project in Zhanjiang, begun in 2012, that has an annual capacity of 9 million tonnes of crude steel. Planned start-up for the facility is in 2016. (Source: Reuters)
Sandy Williams
Read more from Sandy WilliamsLatest in International Steel Mills
Nippon requests Japan’s government restrict steel imports from China
Nippon Steel and other Japanese steelmakers are lobbying for the Japanese government to limit imports of Chinese steel, according to a report in Reuters.
SSAB taps Sjöström as new president, CEO
SSAB has appointed Johnny Sjöström as president and CEO of the Swedish steelmaker.
ArcelorMittal Q2 earnings dive, Mexican strike hits profits
ArcelorMittal’s earnings fell precipitously from a year earlier as the company said current market conditions are unsustainable.
Nippon withdraws from JV with China’s Baosteel
Japan’s Nippon Steel announced it was withdrawing from a joint venture (JV) with China's Baoshan Iron & Steel (Baosteel) that served the Chinese automotive industry.
SSAB adjusts output in weak Q3, readies for Q4 rebound
SSAB said lower plate prices in the US were the primary reason for reduced results in the second quarter. With a dismal Q3 outlook, the Swedish steelmaker is adjusting production across its facilities. That includes moving up its annual US mill outage in anticipation of a better Q4. SSAB Americas Revenues in the Americas segment […]