BUENOS AIRES – Steel companies must act to ensure prices do not suffer because of overproduction, particularly by Chinese producers, industry leaders said at a meeting on Monday.
China’s steel output has soared in the last decade and now represents more than a third of total world production. Many producers elsewhere fear its shift from net importer to net exporter and an eventual downturn in domestic demand could flood world markets with Chinese steel products.”It’s very likely that in the near future we will have to face a serious problem of overcapacity,” said Paolo Rocca, president of Argentine steel conglomerate Techint.”Any reduction in the rate of demand growth in China, if not contained at a regional level, could have a strong negative effect on worldwide markets,” Rocca told the annual meeting of the International Iron and Steel Institute (IISI) in the Argentine capital, Buenos Aires.According to official figures, China’s steel product exports in the first seven months of the year reached 20,67 million tonnes, up 58 per cent on the same period last year, while its imports dropped 29 per cent.US steelmakers have already called on the Bush administration to stem the flow of Chinese imports, and that theme dominated the IISI gathering.The IISI groups the world’s biggest steel-making firms but includes relatively few Chinese producers.”It is crucial to remember that all good things come to an end when every company makes a decision to increase production,” Akio Mimura, president of the world’s third-biggest steel company, Nippon Steel Corp, told delegates.”We must never forget when we suffered a supply-demand gap,” he added in an apparent reference to the sudden crash in domestic steel consumption in former Soviet countries in the 1990s.Medium- and long-term forecasts for world steel demand suggest China and India will remain the top consumers, but demand will slow, the IISI said on Monday.While Chinese demand is seen growing 14,4 per cent this year, that is seen slowing to 10,4 per cent.Up to 2010, Chinese demand for steel is expected to grow at a slower pace – up 8,4 per cent, and from 2010 to 2015 by 6,2 per cent per year.But despite the longer-term concerns about excess production, delegates said they were optimistic that the industry would continue to grow.Ian Christmas, IISI secretary general, said the industry remained optimistic despite the slower forecast for next year, which is based on forecasts of slower growth in general.”The underlying trend is slowing down a bit, but most people are still quite optimistic about next year,” he told a news conference.Nampa-ReutersMany producers elsewhere fear its shift from net importer to net exporter and an eventual downturn in domestic demand could flood world markets with Chinese steel products.”It’s very likely that in the near future we will have to face a serious problem of overcapacity,” said Paolo Rocca, president of Argentine steel conglomerate Techint.”Any reduction in the rate of demand growth in China, if not contained at a regional level, could have a strong negative effect on worldwide markets,” Rocca told the annual meeting of the International Iron and Steel Institute (IISI) in the Argentine capital, Buenos Aires.According to official figures, China’s steel product exports in the first seven months of the year reached 20,67 million tonnes, up 58 per cent on the same period last year, while its imports dropped 29 per cent.US steelmakers have already called on the Bush administration to stem the flow of Chinese imports, and that theme dominated the IISI gathering.The IISI groups the world’s biggest steel-making firms but includes relatively few Chinese producers.”It is crucial to remember that all good things come to an end when every company makes a decision to increase production,” Akio Mimura, president of the world’s third-biggest steel company, Nippon Steel Corp, told delegates.”We must never forget when we suffered a supply-demand gap,” he added in an apparent reference to the sudden crash in domestic steel consumption in former Soviet countries in the 1990s.Medium- and long-term forecasts for world steel demand suggest China and India will remain the top consumers, but demand will slow, the IISI said on Monday.While Chinese demand is seen growing 14,4 per cent this year, that is seen slowing to 10,4 per cent.Up to 2010, Chinese demand for steel is expected to grow at a slower pace – up 8,4 per cent, and from 2010 to 2015 by 6,2 per cent per year.But despite the longer-term concerns about excess production, delegates said they were optimistic that the industry would continue to grow.Ian Christmas, IISI secretary general, said the industry remained optimistic despite the slower forecast for next year, which is based on forecasts of slower growth in general.”The underlying trend is slowing down a bit, but most people are still quite optimistic about next year,” he told a news conference.Nampa-Reuters
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