After a golden decade of fast growing in the beginning of the 21st century, the severe problem of oversupply in China’s iron and steel industry started to take its toll in 2012, a year which witnessed one of the hardest and most challenging for the steel sector. Prices fell, demand declined and costs surged and consequently profits plummeted.

In Q4 2012, boosted by the higher prices and demand, sparked by further stimulus for infrastructure projects by the government and improved house sales, the country’s major steel mills began to return to profit. CISA data showed that major steelmakers registered a total profit of RMB 307M ($48.1M) in November, the first monthly profit since June. Further price gains are expected in Q1 2013.
China produced 660Mt of crude steel in the first 11 months 2012, up 2.9% from the same period in 2011. In contrast, output grew by 9.8% in the same period 2011. On a monthly basis, November output at 57.5Mt, some 10% more than in October.

China’s daily output of crude steel is estimated at 1.945Mt in the first ten days of December , down 0.76% from the previous 10 days, according to the latest data released by the China Iron and Steel Association (CISA).

China exported 5.13Mt of rolled steel products in the first 11 months 2012, 0.9Mt more than in the same period in 2011, but total exports including semis reached 45.78Mt during the January-October period, an increase of 11.8% from the year earlier
Imports of rolled products reached 1.07Mt in the same period, 0.16Mt less than it did in the same period in 2011. This strongly indicate damped domestic demand.

Source: China Metals e-mail