China’s steel industry in trouble: association

%3CP%3E%3CFONT%20face%3DVerdana%3EChina%27s%20steel%20industry%20was%20confronted%20with%20its%20greatest%20difficulties%20since%20the%20turn%20of%20the%20century%20last%20year%2C%20as%20the%20global%20economic%20slowdown%20curtailed%20demand%2C%20an%20industry%20association%20said%20Thursday.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EChina%27s%20crude%20steel%20output%20grew%203.1%20percent%20to%20716.54%20million%20tonnes%20in%202012%2C%20down%205.8%20percentage%20points%20from%20a%20year%20earlier%2C%20the%20China%20Iron%20and%20Steel%20Association%20%28CISA%29%20said%20in%20a%20press%20release.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3ECISA%20said%20its%20member%20companies%20saw%20profits%20plummet%2098.22%20percent%20to%201.58%20billion%20yuan%20%28about%20252%20million%20U.S.%20dollars%29%20year%20on%20year%2C%20while%20total%20sales%20dropped%204.31%20percent%20to%203.54%20trillion%20yuan.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3ELast%20year%2C%2028.75%20percent%20of%20its%20member%20companies%20reported%20losses%2C%20the%20association%20said.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EFixed-asset%20investment%20in%20the%20sector%20increased%202.97%20percent%2C%20dropping%2012.54%20percentage%20points%20from%20the%20previous%20year.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EPrices%20for%20steel%20products%20experienced%20a%20downward%20trend.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EBy%20the%20end%20of%20last%20year%2C%20the%20composite%20steel%20price%20index%20for%20the%20overseas%20market%2C%20which%20is%20issued%20by%20CISA%2C%20dropped%206.3%20percent%20from%20a%20year%20earlier%2C%20while%20the%20index%20for%20the%20domestic%20market%20dived%2012.57%20percent%2C%20the%20association%20said.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EThe%20steel%20industry%20faced%20an%20extremely%20difficult%20situation%20in%202012%2C%20as%20an%20economic%20slowdown%20in%20China%20and%20the%20rest%20of%20the%20world%20curtailed%20market%20demand%20and%20resulted%20in%20flagging%20steel%20prices%2C%20the%20association%20said.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EChina%27s%20GDP%20grew%207.8%20percent%20year%20on%20year%20to%20reach%2051.93%20trillion%20yuan%20last%20year%2C%20the%20slowest%20growth%20rate%20since%201999%2C%20according%20to%20the%20National%20Bureau%20of%20Statistics.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3ESlowing%20economic%20growth%20has%20decreased%20steel%20demand%20from%20downstream%20industries%2C%20such%20as%20the%20railway%20construction%2C%20property%20development%20and%20shipbuilding%20sectors%2C%20the%20association%20said.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EMeanwhile%2C%20China%27s%20steel%20sector%20still%20has%20excessive%20production%20capacity%2C%20which%20has%20caused%20steel%20output%20to%20greatly%20exceed%20market%20demand.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EAs%20a%20result%2C%20steel%20producers%20competed%20fiercely%20to%20boost%20their%20sales%2C%20which%20in%20turn%20resulted%20in%20steel%20price%20decreases%2C%20the%20association%20said.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3E%22The%20steel%20industry%20experienced%20its%20greatest%20difficulties%20since%20the%20beginning%20of%20the%20century%2C%22%20the%20association%20said.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EHigh%20prices%20for%20imported%20iron%20ore%20also%20eroded%20steel%20companies%27%20profitability%20last%20year.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3E%22Although%20steel%20prices%20remained%20at%20a%20low%20level%20in%202012%2C%20prices%20for%20iron%20ore%20imports%20tended%20to%20climb%20as%20soon%20as%20steel%20prices%20saw%20even%20a%20slight%20rise%2C%20and%20at%20a%20much%20greater%20margin%2C%22%20the%20association%20said.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3ELast%20October%2C%20the%20association%27s%20steel%20price%20index%20inched%20up%20just%202.9%20percent%20month%20on%20month%2C%20while%20order%20prices%20for%20imported%20iron%20ore%20surged%2015.9%20percent%20from%20their%20lowest%20level%20in%20September%2C%20it%20said.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EThe%20difficulty%20and%20high%20cost%20of%20obtaining%20loans%2C%20burdens%20created%20by%20taxes%20and%20fees%20and%20a%20lack%20of%20self-discipline%20in%20the%20sector%20have%20added%20to%20the%20sector%27s%20current%20troubles.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3ESince%20China%27s%20economy%20is%20showing%20signs%20of%20stabilization%2C%20CISA%20forecast%20that%20the%20industry%20will%20face%20a%20better%20environment%20this%20year%20and%20that%20demand%20for%20steel%20products%20will%20rebound%20to%20some%20extent.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EThe%20economy%27s%20growth%20rate%20quickened%20to%207.9%20percent%20in%20the%20fourth%20quarter%20last%20year%2C%20ending%20a%20seven-quarter%20slowdown%20and%20increasing%20from%208.1%20percent%20in%20the%20first%20quarter%2C%207.6%20percent%20in%20the%20second%20and%207.4%20percent%20in%20the%20third%2C%20respectively.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3E%22However%2C%20the%20industry%20should%20not%20underestimate%20the%20difficulties%20and%20challenges%20that%20may%20appear%20this%20year%2C%22%20the%20association%20said.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EThe%20industry%20should%20prioritize%20the%20elimination%20of%20excessive%20capacity%20and%20strengthen%20monitoring%20of%20performance%20and%20trends%2C%20as%20well%20as%20enhance%20self-discipline%2C%20to%20avoid%20vicious%20competition%2C%20the%20association%20said.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3E%3CBR%3E%28xinhua%29%3CBR%3E%3C/FONT%3E%3C/P%3E