China Securities Journal citing the China Iron & Steel Association said China steel sector made massive losses in the first quarter as high raw material costs and sluggish demand bit into business.
An unnamed CISA official was quoted as saying that "This is the first time the whole steel sector has suffered losses since the 21st century."
The paper said Chinese steel mills producing around half of the world steel output lost CNY 2.8 billion in the first two months of this year.
The CISA official did not disclose the total losses Chinese steelmakers made in the first three months. The official added that "The situation may improve in the second to third quarter, but steel mills still find it difficult to avoid losses and they have faced huge pressure on shrinking demand."
The double whammy of high production costs and a rapid decline in steel demand has forced the world largest steel sector to produce at losses since the fourth quarter last year.
Chinese steelmakers producing around half of the world steel output have ramped up production to tap into a seasonal pick-up in steel demand, shrugging off cooling economic growth in the world's second-largest economy.
China major steelmaker, Angang Steel expects to record a net loss of CNY 1.888 billion for the first quarter after losing CNY 2.16 billion for 2011.
Despite the seasonal recovery in steel demand, the slower-than expected pace will continue to weigh on steelmakers as China steel output continues to rise rapidly, hitting a record 61.58 million tonnes in March.
( Source: Steelguru.com )