Dazhong Daily reported that domestic steel mills have plunged into losses in October due to slowing down economic growth and contracting export orders, and the loss is expected to expand in the fourth quarter. To survive the whole industrial loss, mills in Shandong incl. Rizhao Steel, Laiwu Steel and Taishan Steel have taken a series of steps to minimize losses and restore market balance

 

According to the report, domestic steel prices have fallen 30% to 40% from June record. However, steelmaking costs have soared up during January to September with imported iron ore price surging 51.45% and coking coal price leaping 87.1%. Currently, 40% to 50% of smaller mills in Hebei Tangshan have closed down.

 

Mr Liao Haitin party secretary of the mill said "Rizhao Steel Group has lost CNY 400 million in September and is expected to lose CNY 600 million in October. Rizhao Steel enjoys convenient locations, and can save iron ore transport costs by CNY 120 per tonne compared with that of Jinan Steel, Laiwu Steel.

 

The worldwide economic turmoil has reduced steel mills' export orders significantly. Mills in local have reported 20% falls in export orders. China's steel products export during January to September lost 2.14% YoY with that of steel billet diving 81.07%. However, local development & reform committee contended that China is still in the progress of urbanization and industrial structure upgrading, therefore, the steady demand growth will not change. And local mills should sped up obsolete capacity elimination and improve product mix to restore market balance.

 

 

Editor:    Ivy

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