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The Chinese steel market began to decline
In mid-April in the Chinese metal market began to decline. Given the continuing decline in activity in the industrial and construction sector of the Chinese economy, the demand for steel products is virtually absent. Chinese experts believe that the measures announced by the government in March to stimulate the economy through additional investments in the construction of railways will not have a significant impact on the actual level of rolled steel consumption, the portal Rusmet.ru reports.
Meanwhile, according to the results of the first quarter of 2014, 202,7 million tons of steel were smelted in China, by 5,7% more than in the same period a year earlier, and in March the output volume for the first time exceeded the level of 70 million tons. The national market was simply unable to master such a mass of steel products, and it was not possible to export all the surplus to Chinese suppliers.
China’s problems with over-production of steel appear to be long-term in nature. According to the CISA National Metallurgical Association, it may take up to 2 - 3 years to restore the balance in the market. It’s still difficult to hope for a sharp increase in demand for steel products in China, and government measures aimed at reducing steel production through toughening environmental standards are very limited in practice.