On Sunday, April 28, the China Iron and Steel Association (CISA) said the industry faces ongoing risks from overcapacity, as well as weakening demand and increased raw material costs that could reduce profits for steelmakers.
The vast steel sector of the People's Republic of China (PRC), which has cut steel production by 150 million tonnes over the past three years, is "far from meeting its targets" amid supply-side reforms in Beijing, the association said in an online statement. /p>
Some companies have sought to increase production by producing low-grade steel and using cheaper but more polluting induction furnaces, CISA said, adding that fixed capital investments in the downstream and downstream of ferrous metals rose 30.6 percent in the first quarter.
The association said the industry must work to avoid any illegal expansion of new capacity, reduce leverage and move forward with the restructuring of zombie firms.
Sharp increases in commodity prices in the first quarter when imported iron ore rose from $ 60 to $ 90 per ton, it also significantly reduced the industry's profitability.
The sector is also at the center of the government's pollution control efforts, although adhering to stricter standards can increase production costs and reduce profitability.
The association also called on banks to lift restrictions on lending to the industry to help companies get financing and lower their costs.