The China Iron and
Steel Association said that almost half of China's large and mid size steel
mills reported losses during the first nine months of 2012.
Combined losses
amounted to CNY 26.7 billion, marking a 41.5 fold increase in losses year on
year. Last year's losses were CNY 644 million.
Mr. Wang Xiaoqi, VP
of CISA said that the steel companies' sales fell 6.5% from one year earlier
during the first three quarters, due to a slowing economy and oversupply.
Data showed that
China's apparent consumption of steel rose 2% to 510.3 million tonnes during
the first nine months, slower than the 11.73% increase seen in the same period
last year.
Demand has softened
in the world's largest steel producing nation since the start of the year, as
the country scaled back investment in rail construction and property
development amid a slowing domestic economy.
Mr. Wang said that
“the steel industry is facing continued challenges because of weak steel
prices and a rebound in iron ore costs.”
However, Wang
predicted demand recovery in the fourth quarter with the implementation of pro
growth measures rolled out by the government. These included more aggressive
fiscal spending, structural tax reduction, monetary loosening and state-run
sectors opening to private capital.
He said that
“Steel prices rose slightly in late September, showing signs of a recovery
in the steel market. Demand may improve in the fourth quarter.”
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