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China’s Steel Industry Sounds the Alarm Over Crisis Conditions

  • Voluntary output cuts are planned as demand stays weak
  • Stockpiles of the alloy have risen way above usual levels
Bundles of steel tubes at a metal stock yard in Shanghai, China.

Bundles of steel tubes at a metal stock yard in Shanghai, China.

Photographer: Qilai Shen/Bloomberg

China’s steel mills are sounding the alarm over crisis conditions in the industry as margins plunge due to weak demand. 

The starkest warning yet has come from Hunan Valin Iron & Steel Group, which met this week to discuss the rapid downturn in the sector and the measures it needs to take to ensure the company’s survival, including halting unprofitable production. Citing industry experts, the mill based in southern China said it expects the crisis to persist for five years.