According to a report released by China Metallurgical Industry Planning and Research Institute, steel production in China is unlikely to recover next year as demand for iron ore will further decline by 4.2 percent.
As per provisional data, the country exported 10.75 lakh tonnes of iron ore in the first seven months of FY2015-16, Minister of State for Steel and Mines Vishnu Deo Sai said in a written reply to the Lok Sabha. That will reinforce expectations that Beijing will have to roll out more stimulus in 2016 after six interest rate cuts over the past year and a slew of other measures.
Chinese steel mills have cut shipments of both products since 2008 when duties were raised to current levels. "We think it's a longer-term dynamic playing out: China exporting its surplus to the Western world", said ANZ analyst Daniel Hynes, referring to a 15 percent surge in unwrought aluminium and product exports to 450,000 tonnes in November.
Consumption of steel products is expected to drop to 648 million tonnes in 2016, also down 3 percent from 2015.
Market participants were surprised by the move, coming just weeks after authorities hit back at criticism from overseas about its support for the industry and saying Beijing did not set out to encourage steel firms to boost exports.
China would also cut tariffs on some energy raw materials, but the ministry did not identify which materials would be subject to the cut.
It kept tariffs on naphtha, jet kerosene, diesel, fuel oil, ethylene/propylene, propane and benzene unchanged.
Source: http://presschronicle.com/