December 02, 2008

Crude steel output growth to further slow down in Q3 - Haitong Securities

According to Haitong Securities, China's pig iron and crude steel output growth will be further moderated in the third quarter of this year.

China produced 46.94 million tonnes of crude steel up by 10.18% YoY and 43.39 million tonnes of pig iron in June up by 6.87% YoY respectively. The growth rates have been moderated compared with the previous three months due to the steep input costs and environmental issues. Crude ore output grew 27.14% YoY to 81.56 million tonne in the same month, indicating a mining upsurge at home stimulated by the record high iron ore prices.

Haitong Securities said that steel exports in June has decreased 340,000 tonnes from the previous month, imports also dropped 80,000 tonne, while import and export of billet steel all posts at 20,000 tonnes. Therefore, domestic supply of steel products has increased by 17.78% YoY in June far exceeding the less than 11% consumption growth rate of last year.

Haitong Securities said China's pig iron and crude steel output will be further slowed down in the third quarter due to the output disruptions resulted from Beijing Olympics. Some construction activities will also be suspended by then, however, the impact will be heavier on supply than that on demand.