According to Mr Zhu Jimin chairman of CISA, unveiling the high hovering output and low lingering profits for the Chinese domestic steel industry, new target of the backward capacity elimination issued by Ministry of Industry and Information Technology in July was significantly increased to 31.22 million tonnes from 26.53 million tonnes in May.
He said that "However what embarrassed the industry was the ever increasing crude steel output. The domestic crude steel output amounted to 0.35 billion tonnes in H1 up by 9.6%YoY. As estimated by China Iron and Steel Association, the total output would finish at 710 million tonnes in 2011 far beyond originally expected 0.66 billion tonnes."
The average domestic crude steel output stayed at a high level on daily basis, breaking 2 million tonnes during the third ten days of Jun, hitting a historical high and then somewhat fell back due to power rationing measures, but eventually started rebounding in August.
The output rebound in August could be largely attributed to the surging movement of steel prices since July with adorable profits of some varieties, spurring steel mills production enthusiasm explained by analysts, the market prices of high speed wire rod, welded pipe, HR strip steel and steel billets even hit a yearly record during Mid August and industrial materials like HR products also turned to be optimistic accompanied with soaring momentums. Construction steel products boasted larger lucrative room.
With regard to the elimination activities, MIIT and National Development and Reform Commission jointly notified the arduous task to be finished for next four months to come owing to a great gap between the current progress and final target.