Flat Output Will Help Steelmakers Strike Better Iron Ore Deals

Confirmation of the problems in the steel industry comes from Shan Shanghua, secretary general of the China Iron and Steel Association (here via People’s Daily).

He says production will be flat this year at 500 million tonnes, revising the association’s previous forecast of 5%-10% growth. Nor does he expect output to grow next year. The world wide economic slowdown is to blame (see “Baoshan Steel Will Cut Prices, Again, As Demand Slumps“).

Shan was speaking at a conference in Qingdao that unofficially kicks off the annual price contract between Chinese steelmakers and their iron ore suppliers. As well as negotiating down record prices, the steelmakers want to overhaul the way prices are negotiated to unify the prices of imports from all countries, as Japan’s steelmakers do. The stalling of production growth, which has left 80 million tonnes of iron ore stacked up at Chinese ports, will give China’s steelmakers a stronger hand in those discussions.

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One response to “Flat Output Will Help Steelmakers Strike Better Iron Ore Deals

  1. Pingback: Vale Backs Down Over Iron Ore Premium « China Bystander

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