Reuters reported that the next five years will give China steel sector its last chance to resolve structural problems through a nationwide merger program.
Mr Zhang Xiaogang president of the Anshan Iron and Steel Group issued a stark warning to the domestic steel sector, saying that efficiency was shrinking as a result of chronic overcapacity problems.
He said that "The Chinese steel sector is facing an extremely big challenge and steel enterprises mustn't take the old road and chase their own investments, additional capacity and their own market share at a time when there is already overproduction."
Mr Zhang said the performance of the company in the fourth quarter of 2010 was not too good. He said “We didn't make losses in the fourth quarter but profits were lower than in the first, second and third quarters.”
Mr Zhang told reporters at last year that NPC session that the issues surrounding the merger were expected to be solved by the time parliament met again in 2011. This year he said the remaining stumbling blocks were likely to be overcome very soon, but he wouldn't provide further detail.
Mr Zhang said Angang and other steel firms were currently looking for investment opportunities abroad but costs were currently too high. He said that "Everybody wants to have but you can't just look to the next two years; you have to look at the end of five years and see if the results are good or not, whether the costs are good and whether there is competitiveness."
Mr Zhang added Chinese steel mills were unlikely to accept the more flexible monthly or even daily price adjustments now being offered by leading global miners saying China still seeks longer term agreements with the likes of Rio Tinto, BHP Billiton and Vale.
Anshan Iron and Steel based in northeast China Liaoning province and the parent of Shenzhen listed Angang has been involved in a protracted merger with local rival Benxi Iron and Steel.
China steel industry, by far the world biggest is estimated to have a total capacity of around 800 million tonnes. Crude steel production last year stood at 627 million tonnes. The sector has been struggling with lower margins in recent months with steel price increases failing to match the surge in the cost of key raw materials iron ore and coking coal. In its new five year plan for the sprawling sector, Beijing is pushing for a comprehensive consolidation drive saying that fewer mills will help create higher industry standards and reduce pollution and energy waste, as well as giving China a bigger say in global iron ore pricing.(sourced:Reuters)
Tags : Angang, China's crude steel production 627 million tonnes, raw material,
Mr Zhang Xiaogang president of the Anshan Iron and Steel Group issued a stark warning to the domestic steel sector, saying that efficiency was shrinking as a result of chronic overcapacity problems.
He said that "The Chinese steel sector is facing an extremely big challenge and steel enterprises mustn't take the old road and chase their own investments, additional capacity and their own market share at a time when there is already overproduction."
Mr Zhang said the performance of the company in the fourth quarter of 2010 was not too good. He said “We didn't make losses in the fourth quarter but profits were lower than in the first, second and third quarters.”
Mr Zhang told reporters at last year that NPC session that the issues surrounding the merger were expected to be solved by the time parliament met again in 2011. This year he said the remaining stumbling blocks were likely to be overcome very soon, but he wouldn't provide further detail.
Mr Zhang said Angang and other steel firms were currently looking for investment opportunities abroad but costs were currently too high. He said that "Everybody wants to have but you can't just look to the next two years; you have to look at the end of five years and see if the results are good or not, whether the costs are good and whether there is competitiveness."
Mr Zhang added Chinese steel mills were unlikely to accept the more flexible monthly or even daily price adjustments now being offered by leading global miners saying China still seeks longer term agreements with the likes of Rio Tinto, BHP Billiton and Vale.
Anshan Iron and Steel based in northeast China Liaoning province and the parent of Shenzhen listed Angang has been involved in a protracted merger with local rival Benxi Iron and Steel.
China steel industry, by far the world biggest is estimated to have a total capacity of around 800 million tonnes. Crude steel production last year stood at 627 million tonnes. The sector has been struggling with lower margins in recent months with steel price increases failing to match the surge in the cost of key raw materials iron ore and coking coal. In its new five year plan for the sprawling sector, Beijing is pushing for a comprehensive consolidation drive saying that fewer mills will help create higher industry standards and reduce pollution and energy waste, as well as giving China a bigger say in global iron ore pricing.(sourced:Reuters)
Tags : Angang, China's crude steel production 627 million tonnes, raw material,
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