40Pct Iron Ore Mines in China Suspends Operation Just FYI.
Iron & Steel is among the hardest-hit industries in China’s economic downturn.
Metallurgical Mines'Association of China (MMAC) said Thursday that 40 percent of the country’s iron ore mines had suspended production as the world’s largest steel market faces unprecedented challenges.
About 40 percent of China's iron ore mines have suspended operations as a result of slumping price, Liu Xiaoliang, executive deputy secretary general of MMAC said at an industry conference in Dalian on Thursday.
Iron & Steel is among the hardest-hit industries in China’s economic downturn as director of China Iron & Steel Association(CISA) Zhu Jimin recently disclosed that total net income generated by the association’s members dived 96% to 2.39billion RMB in the first half of 2012.
The entire steel market sank to a new low in August, and no steelmaker, including China’s largest one Baosteel, could avoid losses, said honorary chairman of CISA Wu Xichun.
“The price drop is fatal,” he said, explaining that prices of steel products were 1000 RMB lower than that of earlier this year and there’s no way to cover the losses by cutting costs.
Net income ratio of the industry dropped to 2.42% in 2011, from 2.57% in the previous year and 8.11% in 2004, weighed down by continuously-falling prices on higher inventory and imbalanced demand-supply.
As of August 11th, inventory of five major steel products stayed at a history high of 15.15million tons, up 1.35million tons from the same period in the previous year.
However, newly added capacity make things worse as latest statistics show that new raw output grew 2.5% month-to-month in July which added to the demand-supply imbalance.
Liu predicted prices of iron ore will stay between $90 and $110 in the following two years.
Here's the link: https://english.caijing.com.cn/2012-09-28/112161506.html