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China Daily Website

Steel supply glut continues to dampen prices

Updated: 2013-07-29 17:17
( Xinhua)

BEIJING - China's steel prices dropped further in June, as output continued to grow in an industry already reeling from overcapacity, according to official data issued on Monday.

The steel price composite index averaged at 99.15 points in June, retreating 4.45 points from a month earlier and down 16.72 points from the same period last year, the National Development and Reform Commission said in an online statement.

The price decline came as production has continued to expand in the oversupplied sector, with output of crude steel rising 7.4 percent year on year to 389.87 million tons in the first half of the year.

The growth rate was 5.6 percentage points higher than that seen in the same period last year.

China's massive stimulus response to the 2008 financial crisis has left some industries with a production glut that is still weighing on the country's overall economic growth, which slowed to 7.5 percent in the second quarter.

In an effort to ease overcapacity in affected industries, the government last week ordered some 1,400 companies in 19 sectors, including steel and cement, to eliminate outdated production capacity by September and eliminate excess capacity by the end of the year.

 
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