Mainland steelmakers should not be too optimistic about demand this year because the industry was suffering from overcapacity, a senior official at the China Steel and Iron Association said.
Wu Xichun, an adviser to the association, said steel production capacity was likely to outstrip output this year, the China Securities Journal reported.
The mainland's steel production capacity reached 660 million tonnes last year, but the industry's output was only about 500 million tonnes.
'It is not easy for the industry to maintain 500 million tonnes of output this year,' Mr Wu said.
The Shanghai Securities News yesterday cited a Baosteel Group executive as saying the top steelmaker reported a 32 per cent plunge in earnings last year to 23 billion yuan (HK$26.08 billion).
Baosteel cut production by 30 per cent in the final quarter last year amid rapidly shrinking demand from industries such as shipbuilding, it said.
