Steelmakers cut output in face of falling prices
Some mainland steelmakers are tentatively curbing output by starting plant maintenance as weak prices squeeze margins. However, the cuts look too little and too late to support steel prices, which are at their lowest level in more than nine months.
Some mainland steelmakers are tentatively curbing output by starting plant maintenance as weak prices squeeze margins.
However, the cuts look too little and too late to support steel prices, which are at their lowest level in more than nine months.
With a glut in supply persisting, an extended period of weak steel prices on the mainland, the world's largest consumer and producer of steel, is likely to put more pressure on iron ore. Prices for ore have fallen by a third this year and are set to dip further as more ore comes on stream.
Steel mills, which ramped up production earlier in the year on hopes for strong demand, are reluctant to make decisive cuts even as the mainland's economic growth falters, for fear they could lose market share and that banks could pull back credit.
Baoshan Iron & Steel, the biggest listed steelmaker by market value, better known as known as Baosteel, slashed prices for the first time in nine months this month and is expected to cut again next month, slicing razor-thin margins further.
