Xinhua reported that Chinese steelmakers are dealing with a substantial oversupply problem that will likely force them to transform the way they do business.
A report posted on the China Iron and Steel Association's website on Monday said that a weak economic recovery, low demand, high prices for raw materials and high steel output have caused an oversupply of steel products.
The report, which was compiled by the Laigang Group, a major iron and steel corporation based in east China's Shandong Province, said unfavorable industry conditions will remain in July, a slack season for the manufacturing industry.
Although an overall urbanization plan is expected to be reviewed in July, it is not likely to affect the iron and steel industry in the short term.
The International Monetary Fund recently cut its forecast for China's 2013 economic growth from 8% to 7.75%, indicating slower growth for the country's economy.
However, figures from the National Bureau of Statistics showed that steel output increased by 11.3% year on year to 91.19 million tonnes in May. In the first five months of the year, steel product output rose 10.8% year on year to reach 426.16 million tonnes.
Meanwhile, the Complex Steel Price Index released by CISA dropped by 13.35% year on year to hit 101.83 by the end of May, down 3.71% from that of April.
(Source: www.steelguru.com )