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CISA Said Problems Facing the Steel Industry Can not be Solved in the Short Term

China Iron and Steel Association (CISA) said the problems facing the steel industry can not end soon, serious
overcapacity and the adjustment of economic structure make the situation facing the steel industry extremely complex. China’s steel industry has been faced with the problem of overcapacity resulting in profits of Iron and Steel Enterprise is very low and heavily indebted.

Although large iron and steel enterprises is still expanding production capacity on the grounds that China’s steel demand growth, the Chinese government is anxious to limit capacity, concerned that sustained losses will lead to the entire steel industry over-indebted to bring about collapse. 

China Iron and Steel Association Deputy Secretary-General said industry overcapacity "perhaps beyond our imagination", adding that the steel industry is facing a very complicated situation, because of a slowdown in China’s economic growth and making structural adjustments, and affected by eliminating the outdated industry. However, demand is steadily rising, with companies keen to expand market share, prompting steel companies continue to increase production capacity.

China Iron and Steel Association said  "These problems can not be resolved quickly." at an industry conference. China’s iron ore imports in 2014 are expected to increase by 6% over the previous year, to reach 870 million tons, lower four percentage point, compared with last year 10.2%. Although the steel industry has been forced to restructure, but the building demand of Middle and Small Towns is sufficient to support the growth of steel consumption. CSIA expects that China’s crude steel production will grow about 3 percent this year, to 815 million tons, will hit record highs. CSIA expects that China’s macro economy does not appear sharp slowdown in the future, but the growth pace of steel industry will slow down. China may import more iron ore from  Chinese projects in Africa, compare with the traditional iron ore suppliers such as Brazil, Australia and so on.