China’s steel industry is currently suffering from low levels of growth and narrowing profit margins compared to other industries, and the outlook for 2011 is not much more promising, state media reported. According to Luo Tiejun, a senior official at the Ministry of Industry and Information Technology, average industrial profit margins stood at the 6% mark, while the steel sector runs on margins of 3.5% as rising material costs and overcapacity weigh the market down. The malaise in China’s steel industry should prove a catalyst in the government’s streamlining of the sector, Luo said. According to estimates, domestic crude steel production next year will increase from the estimated 630 million ton output in 2010, while consumption should also rise, but not to any great extent.
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