One production report told us the whole story about what is happening in the Chinese economy.
For the first time in more than 30 years, crude steel output fell in 2015 from 2014, leading analysts to conclude that the great steel boom is over.
The country’s statistics bureau said crude steel output fell 2.3% to 803.8 million tonnes in 2015. And China’s crude steel output is expected to decline for a second straight year in 2016 on continued weakness in demand, according to a government study.
December production also fell 5.2% to 64.37 million tonnes in December.
China’s government is pushing to erode overcapacity in the steel industry, as the country aims to shift economic growth toward more consumption rather than heavy investment and cut pollution in some provinces, such as Hubei.
Analysts say the are is around 300 million tonnes of excess capacity in China.
That has already forced many Chinese mills to slash output or shut permanently, or divert steel products into global markets at record levels. China’s steel exports surged nearly 20% in 2015 to 112 million tonnes as producers diverted product from depressed local economy onto the world market.
China’s Iron ore imports hit a record monthly high in December as world prices sagged to multi-year lows ($US38.30 a tonne was the 12 year low reached on December 11 last year).
Iron ore imports jumped to 96.27 million tonnes, up 17% from November and 10.8% from December, 2014. Full-year imports rose 2.2% to reach 952.72 million tonnes, also an all-time high, but a sharp slow down from the 13.8% rise (to just over 932 million tonnes) seen in 2014.
Steel exports rose 11% in December to 10.66 million tonnes from the previous month, the second highest ever, according to the customs data. For the year, exports jumped 20% to a record 112.4 million tonnes, an all-time high.
