China gradually cuts growth in steel production - Baosteel

The period of rapid growth in the steel industry in China has come to an end, according to a statement from Baosteel Corp, the country's largest steelmaker. The country is likely to have negative growth in steel production in the coming years.

At the same time, the steel company estimates the country's steel production at 6 percent higher than official estimates. Baosteel reports that China's national steel production reached 822 million tonnes in 2013. At the same time, the 88 enterprises-members of the CISA accounted for 663.8 million tons of steel production, while the factories that are not members of the association produced 158.17 million tons.

Capacity utilization for CISA factories was 78 percent, while non-member factories had a lower average utilization rate of 60 percent during the year. Baosteel notes that the administration is moving forward by closing outdated and polluting steel facilities while new factories continue to come online.

Chinese steel companies are likely to face difficulties in the second half of 2014. Environmental spending and tax increases could weaken the country's steel industry. In addition, demand growth is expected to remain flat throughout the remainder of the year.

According to the latest CISA data, the downturn in the construction sector will lead to a limitation of steel consumption in the country to 376 million tonnes during the second half of 2014, and the overall year as a whole will be lower than last year.