China Iron and Steel Association deputy head Zhu Jimin said on Wednesday that oversupply was worsening as production cuts by steel mills failed to keep pace with demand evaporating “at unprecedented speed,” Bloomberg reported. “Although China has cut interest rates many times recently, steel mills said their funding costs have actually gone up,” Zhu said. Medium and large mills incurred losses of RMB28.1 billion (US$4.4 billion) in the first nine months of this year, according to a statement from the association, and official statistics showed China’s crude steel output fell 2.1% for the period. Shanghai Baosteel Group forecast last week that China’s steel production could eventually shrink by 20%.
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