“The world’s factory” sees steel output falling for the first time in 20 years

Official
figures show China’s factory output declining, and steel output has declined
for the first time in two decades.

Bloomberg
reports
that the National Bureau of Statistics data for the year’s first
quarter showed crude steel production was down 1.7 per cent compared to the same period in 2014.

The country
is currently doing away with its excess capacity and some of its less efficient steel factories.

“Given that
China has been closing down some of the steel mills, the drop is less than we
expected,” Helen Lau of Argonaut Securities told Bloomberg.

“The less
profitable and higher polluting ones are shutting, but the larger ones are
taking their market share.”

New
property starts fell 18 per cent in the first quarter.

Associated
Press notes
that the quarter results also showed the worst overall growth
in GDP, 7 per cent, since the GFC. It was also down from last quarter’s 7.3 per
cent.

The
Australian Financial Review
reports
that building material production was
down significantly by a number of measures.

Cement
production decreased 20.5 per cent compared to the first quarter of last year,
glass was down 6.6 per cent, steel 1.7 per cent and pig iron 2.3 per cent.

The
simultaneous fall in steel and pig iron was the first since records were kept,
according to Xu Xiangchun, chief information officer at MySteel.

“This
shows the iron price has not yet reached the bottom,” said Xu.

Last week
Australian economist and former ambassador to China Ross Garnaut predicted that
China’s steelmaking
would fall by a quarter by 2030 to 600 million tonnes annually
.

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