China's cabinet will discuss steps this week to support its slumping auto and steel industries, an official source told Reuters on Monday. Assistance plans for auto and steel makers are likely to feature tax cuts and incentives to promote industrial consolidation and eliminate outdated factories, the source said.
"The National Development and Reform Commission together with other departments came to a basic agreement about details for the auto and steel plans last week, and these will be discussed at a State Council meeting this Wednesday," the source said. "If approved, they will be announced and implemented very soon."
The industrial assistance plans are separate from the 4 trillion yuan ($585 billion) of stimulus spending that the government has slated for the next two years.
Meanwhhile comments attributed to Mr Jia Yinsong, inspector at the Department of Raw Materials, Ministry of Industry and Information Technology suggest that China's steel industry is in peril of a heavy reduction, cross industry loss, soaring stock and floor prices.
Mr Jia Yinsong said that steel production in Nov only increased 2.6%YoY with growth slowing by 14.2% and the average daily output in early November was 31.5% lower than that in June.
The fall in steel prices is leading to more losses in the sector. The typical 6.5 mm wire price currently plunged 40.6% from June and 2.75mm HR steel coil price tumbled as sharp as 43.9%. As a result, 59% of the steelmakers ran in the red in October.
Sliding price and shrinking demand have led to the stock of steel products surge by 45% YoY at the end of September, furthermore 120 million tonnes of imported iron ore is currently piled at domestic port and plants and at an average price of USD 110 per tonne, USD 40 per tonne higher than the current spot price.
Sources: The Guardian, Steel Guru
No comments:
Post a Comment