China Daily reported that China's steel industry will continue to face difficulties to cut costs and boost exports in the first quarter amid growing trade disputes, even though domestic demand is gradually increasing, a major economic policymaker said.
The National Development and Reform Commission published a forecast on the steel industry on Tuesday, saying the country's economic rebound in the fourth quarter has brought increasing demand. However, excessive supply will continue to be felt.
Mr Li Xinchuang, deputy secretary of the China Iron and Steel Association at a conference in Beijing said that "China's crude steel production capacity has reached 970 million metric tonnes.”
He said domestic demand for steel products will increase 4.1% this year to 660 million tonnes, while the country's iron ore demand will rise 5.7% to 1.11 billion tonnes.
Mr Zhang Tieshan an analyst at steel information provider Mysteel.com said that "The development of China's steel industry depends heavily on future policies, considering the current situation of rising costs and weak demand.”
Mr Zhang said that the inventories of the country's five major steel markets are at 20.38 million tonnes, the highest since 2004.
In previous years, it was common for steel inventories to rise after the Spring Festival holiday and to gradually be absorbed by the market after March.
However, Mr Zhang said the rising inventories this time were caused by the increasing output of steel makers.
According to figures from the association, China's steel output in the first 10 days of the month reached 1.98 million tons, up 16.7 percent year-on-year and the highest figure since late October 2012.
