According to Reuters, Baoshan Iron & Steel Co. (Baosteel), China's largest publicly traded steelmaker, stated that they think a major cut in crude steel production across the country is highly likely this year. “The possibility of a cut is high,” Baosteel Deputy General Manager Cai Yanbo stated, pointing out that a cut of 50 million tons has been mentioned in government reports. However, he added that he did not expect this practice to start in the short term and that they had appealed to the authorities to avoid sudden and generalized practices.
Production cuts could help stabilize a steel market struggling with oversupply and low demand, support prices and lower raw material costs.
Baosteel Chairman Zou Jinxin pointed to the difficulties in foreign trade and stated that China's steel exports are expected to decrease by about 15 million tons in 2025, while indirect export items are expected to decrease by 20 million tons. These include steel-containing products such as containers, vehicles and construction machinery.
Zou also noted that steel consumption in China's domestic market is expected to decrease by 2%. Despite this outlook, the government is expected to introduce new economic incentives.
Baosteel's exports hit a record high of 6.07 million tons in 2024, while China's total steel exports reached 110.72 million tons, the highest level in nine years. The company's 2025 targets have not yet been announced.
Baosteel announced that its net profit increased by 26.4% y/y in the first quarter of the year, positively affected by cost reductions.
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