Baoshan Iron and Steel Company, China's largest steel maker, says that it expects steel prices to recover from recent declines because of increasing demand from manufacturers.
There was "healthy" demand and the global economy was on the path of recovery after its "most difficult period", Baoshan president Ma Guoqiang said yesterday.
Benchmark Chinese steel prices have dropped 13% since August 4 after gains this year led buyers to run down stocks. Baoshan Steel's profit would rise "significantly" in the second half from the first six months as demand and prices recovered, vicepresident Chen Ying said.
"The most difficult period for the world economy has gone," Ma said. "The economy will recover next year, although the pace won't be fast."
There is strong steel demand from the car, appliance, machinery, oil tanker and power grid industries, and orders for Baoshan were "good".
Baoshan said last Friday that first-half profit plunged 93% because of the economic slowdown. The company is running at full capacity utilisation, Ma said. Baoshan plans to raise output of stainless steel "moderately" in the second half, Chen said.
China's steel output reached a record in July and prices have soared as much as 38% since the government announced a 4-trillion yuan (586bn) stimulus package in November.
The state council, China's cabinet, said last Wednesday that it was studying curbs on overcapacity in industries including steel and cement.
Industry minister Li Yizhong ordered the steel industry to refrain from expanding capacity earlier this month. Mills have the capacity to produce 660-million tons of steel each year and there was demand for 470-million tons, he said.
Source: All Africa
No comments:
Post a Comment