Steel prices to weaken, Baosteel GM says
Mainland steel prices are expected to weaken in the second half of the year as supply continues to outstrip demand, a senior executive with Baoshan Iron & Steel, the country's biggest listed steelmaker, said yesterday.
Overcapacity on the mainland, which produces nearly half the world's steel, has reduced the profit margins of domestic steelmakers. Baosteel reported a 61 per cent drop in first-half earnings on Friday.
With about 300 million tonnes of surplus steel capacity - equivalent to nearly twice the output of the European Union last year - Beijing is implementing measures to end the glut including curbing the sector's access to credit.
Baosteel general manager Dai Zhihao told analysts at a briefing that steel prices would be "volatile in the second half and weaker than the first half".