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Print[Ferro-alloys.com]The chairman of China's largest listed steel producer, Baosteel, has warned of a looming oversupply of iron ore and weaker-than-expected steel production this year, according to The Australian Financial Review.
Baosteel's Xu Lejiang warned that the steel industry should prepare itself for a period of adjustment.
“Steel production is much higher than demand in China,” he said, according to the AFR.
“Iron ore production will also be way higher than demand shortly.”
Rio Tinto Ltd has forecast Chinese steel production to grow at a compound annual rate of three per cent over the next decade, but Mr Xu said he expects steel production to grow at a rate closer to one or two per cent this year.
He said all levels of the Chinese economy are adjusting to the growing realisation that China's new leadership is not going to introduce a fresh round of fiscal stimulus.
“The central government is focusing on economic transformation,” he reportedly said.
“People are starting to realise there won't be another 4 trillion yuan ($A645 billion) stimulus package.”
Separately, Macquarie Group has forecast iron ore prices to fall below $US100 a tonne as steel mills run down inventory.
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