BEIJING Aug 4 China's leading steelmaker has
estimated national crude steel output in 2013 at 822 million
tonnes, nearly 6 percent above official data, suggesting the
country's supply glut is worse than previously estimated.
The figure given in a speech published on Monday by Xu
Lejiang, chairman of the state-owned parent of Shanghai-listed
Baosteel Corp, would take the annual growth rate for
steel output in 2013 from 7.5 percent to more than 13 percent.
China's steel sector, by far the world's biggest, has been
plagued by a persistent oversupply that has depressed prices and
saddled hundreds of mills with colossal debts. Many are already
on the brink of closure.
"The harsh market situation has forced China's steel
enterprises to experience firsthand the negative impact that
overcapacity is having on the healthy development of the steel
industry," Xu told an internal meeting of the China Iron and
Steel Association (CISA) last week.
The government has stepped up efforts to crack down on the
bloated sector, restricting new capacity growth and forcing
outdated and polluting capacity to close, but new plants have
continued to go into operation.
According to a transcript of the speech published on CISA's
website (www.chinaisa.org.cn), Xu said China's official steel
capacity levels reached 1.106 billion tonnes last year, putting
utilisation rates at 74.3 percent. Total capacity has now risen
to 1.14 billion tonnes, Xu said.
He said CISA's 88 members had a total capacity of 842.93
million tonnes last year, and produced 663.8 million tonnes of
crude steel. Smaller, non-member firms had a total capacity of
263.29 million tonnes and produced 158.17 million tonnes,
putting their average utilisation rate at just 60 percent.
Xu said Chinese steel mills would continue to struggle in
the second half of the year amid financing difficulties, rising
environmental compliance costs and higher tax rates.
"The age of rapid growth in the steel sector has already
come to an end and China will gradually see negative growth in
steel production," he said.
China produced 412 million tonnes of steel in the first six
months of 2014, up 3 percent on the official data, CISA said.
But with demand stagnant as a result of downturns in key sectors
like construction, apparent consumption rose just 0.4 percent to
376 million tonnes.
(Reporting by David Stanway; Editing by Richard Pullin)