China 2011 steel output likely 683 million tons

Thu, Jan. 5, 2012

-- China's crude steel production likely reached 683 million tons in 2011
-- Country's 2012 crude steel demand may rise 4% to reach 700 million tons
-- Severe challenges ahead for China's steel exports, association says

BEIJING (MarketWatch) -- China's total crude steel output likely rose 9.2% in 2011 to 683 million metric tons, the China Iron and Steel Association said in a statement Thursday.

Steel exports likely rose 16% to 49 million tons. China's 2012 crude steel demand may rise around 4% to 700 million tons, it said.

However, many steelmakers in China are facing serious financing and capital difficulties, and some will have to halt or delay projects due to capital stress, CISA said.

The National Bureau of Statistics is expected to release steel output data later this month.

China faces "severe challenges" this year on the export front, and international trade frictions may arise, CISA said.

The association projected downside for iron ore prices due to sluggish global demand. "Chinese steelmakers are facing meager profit margins or losses this year," it said.

Import prices for iron ore averaged $166.2/ton in the first 11 months, up 31.5%.

In the first 11 months, CISA's member-mills gained a combined profit of CNY85.3 billion, up 8.1% but their profit margin was only 2.55% during the period, the association said.

(sourced MarketWatch)