The Development of Steel Industry In China

Is it wise and a good time to buy steel products in China? The development of steel industry in China is suffering difficult ordeal, just as the most of steel companies in the whole world. How to survive and win in the severe competition is the top question for steel industry owners. The steel industry in China has developed over several decades into the world biggest. China accounted for over 50% of world steel production in 2013. It has driven by rapid modernisation of its economy, construction, infrastructure and manufacturing industries. From 2014, China steel industry has been facing harshest ever operating environment.

An industry overcapacity may worsen in next two to three years as steel production capacity is still growing, which makes the situation worse. China’s top leaders have pledged to reduce industrial overproduction, especially in steelmaking, which adds to pollution and wasteful investment. But local officials have resisted the push, fearing for jobs and local business interests. Government stimulus policies aimed at supporting economic growth, which includes infrastructure projects, also have kept steel production humming. A fall in the price of raw materials for steel, especially iron ore, is an added impetus for more production.

Chinese leaders have repeatedly said they would use a period of anticipated slower growth to implement structural reform. Growth was at its weakest in 18 months in the first quarter, but the level of support still being poured into companies suggests the re-tooling of the economy has a long way to go.