China’s crude steel capacity grew to about 850Mt by the end of 2011, due to rapid growth of fixed asset investment in the country’s iron and steel industry, according to the data released by the Ministry of Industry and Information Technology (MIIT) on March 1.

Not for the first time, data published by the China Iron and Steel Association (CISA), contradicted the Ministry figures, CISA believing that steelmaking production capacity reached 800Mt by the end of 2010 and the newly-added capacity in 2011 stood at 80Mt. Outdated capacity of 30Mt was eliminated that year.

MIIT expected domestic steels consumption in 2012 to slow and the full year crude steel output to reach 730Mt, up 7% year on year. The amount of imported iron ores was estimated to rise to 730Mt in 2012, but the prices will drop. The highest point of the steel prices in 2012 will be below that in 2011 but prices are predicted to rebound in the second half after experiencing a downward movement.

MIIT also noted that steelmakers should control their production output, increase mergers and reorganisation and continue to eliminate obsolete production capacity.

China’s iron and steel industry has suffered increasing losses since Q4 last year. Data from CISA shows that steelmakers suffered severe losses in January 2012. According to a survey on 29 large steel mills each with an annual production capacity of more than 5Mt, 12 of them had suffered heavy losses in January, or about 41% of the total.

Source: China Metals e-mail [email protected]