LONDON, September 22, 2017 /PRNewswire/ --
This Special Feature is the first in a series of five that look at the implications for the global steel market of China's capacity reduction programme. Chinese steel producers' margins have grown fat this year. We think this is partly due to short-term factors, and prices will fall back. However, this is also likely evidence of improving underlying industry health. Moreover, aside from the usual seasonal variation, we expect this to continue and support improved Chinese industry profitability.
90% utilisation signals return of industry health
- EAF and BOF capacity eliminations are progressing broadly in line with government targets, while all IF capacity is now closed. Total carbon crude steelmaking capacity therefore fell by almost 240 Mt in the last 3 years, to around 1,020 Mt this year.
- In the absence of substantial increases in domestic demand and production, this has been the principal driver of rising capacity utilisation rates, supporting prices and margins this year.
- We expect further eliminations of BOF and EAF capacity over the next three years, helping capacity utilisation approach 90% in 2020 - a level consistent with sustained industry health.
Read the full story: http://bit.ly/Chinese-Steel-Profitability
Read more about CRU: http://bit.ly/About_CRU
CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.
Since our foundation in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China. CRU employs over 250 experts and has more than 10 offices around the world, in Europe, the Americas, China, Asia and Australia - our office in Beijing opened in 2004.
When facing critical business decisions, you can rely on this first-hand knowledge to give you a complete view on a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.
CRU - big enough to deliver a high quality service, small enough to care about all of our customers.