Slowing steel demand in China, the world’s largest consumer of the metal, forced 40 percent of mills to cut output or put plants on maintenance this year, the China Iron & Steel Association said.
Costs of production have risen while steel prices have dropped since April, Luo Bingsheng, vice chairman of the China Iron & Steel Association said today at a press conference in Beijing.
“Facing higher costs and lower prices, steelmakers’ margins will be further reduced, so the situation this quarter is very tough,” Luo said.
Domestic prices of hot-rolled coil fell for seven straight weeks to July 16, as government measures to curb property speculation damped demand for steel. The average import costs of iron ore, a key steelmaking ingredient, in China jumped 46.4 percent in the first half from a year ago, the steel association said today.