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Predict: Steel Industry will Increase Slowly in 2012

Predict: Steel Industry will Increase Slowly in 2012

Affected by global economic negative factors and China’s economic structure adjustment, China’s economic growth in 2012 is expected to slow. We think that China’s export situation in 2012 is more severe, consumption growth is relatively steady, investment is still the main driving force of economic growth. It’s estimated that steel industry will increase slowly in 2012.

Rapid expansion of steel production capacity
China’s crude steel production capacity of 2011 is about 800 million tons, and that of 2012 is estimated to be 870 million tons. The main varieties of steel production capacity keeps a situation of high growth while crude steel production capacity in the expansion. It’s estimated that  the steel  production capacity will increase 98 million tons during 2011 to 2012.

Rebar, wire and the cold rolled product more new capacity, increase the contradiction between supply and demand.

Low efficiency of steel industry was norm
Steel companies profitability continued to decline with the fall in steel prices in  the second half of 2011. The overall efficiency of the steel industry may be better as downstream demand and steel prices rise in future. Steel industry will show a normal low-efficiency operation under the conditions of that steel production capability relative surplus, downstream demand slowdown and  the cost constraints of iron ore.

 

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