Steel consumption in China may fall by 6 percent this year - CISA

Chinese industry representatives stressed that the slowdown in economic growth in the world's 2nd economy will continue to negatively affect industrial demand for steel. In this connection, the Association of Chinese Steel Producers CISA believes that steel consumption in China may decrease by 6 percent in 2015.

China's crude steel consumption fell 3.4 percent for the first time since 1981 last year and fell again in the first quarter, encouraging producers to sell more products overseas. That said, ANZ Bank said last week that it expects China's steel consumption to fall 4 percent in 2015 and 2 percent next year.

China's metallurgical sector has been struggling for years with overcapacity, which is currently estimated at around 300 million tonnes, which is three times the annual steel production of Japan, which is the world's second largest steel producer after China.

CISA vice chairman Wang Likun said at an industry conference that excess steel and iron ore production will continue to drive down prices and cut profits for both steelmakers and miners. “None of them will benefit from this situation as profits have dropped significantly,” he said. Government data showed that China's steel production fell 1.3 percent to 270 million tons in January-April due to a lower forecast for domestic consumption.