Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
By The Epoch Times - China
Contributor profile | More stories
Story Views
Now:
Last hour:
Last 24 hours:
Total:

China’s Steel Industry Hit Hard, With Impacts in Store for Economy

% of readers think this story is Fact. Add your two cents.


Workers at a iron and steel mill in Shenyang, northeastern China’s Liaoning Province, in 2007. Masses of iron ore mines have shut down in China recently and steel prices are in freefall, indicating a potentially harsh reckoning for the economy. (AFP/Getty Images)

The dramatic fall of the price of steel in the third quarter this year has raised concerns about the Chinese steel industry and the economic health of the nation. The trend has caused 40 percent of iron ore mines in China to shut down, according to reports.

Since the beginning of this year, the price of steel in China has been in freefall. The third quarter prospective report issued by Changjiang Securities on Oct. 8 stated that the average steel price for the upcoming three quarters has dropped 12 percent compared to the same period last year.

Earnings for the upcoming three quarters for steel companies will continue to deteriorate as prices for steel and ore continue to drop. At the 2012 Chinese Steel and Technology Forum, Wu Xichun, Honorary President of China Steel Association, said the steel price is on the verge of total collapse. Loss would be inevitable for the entire steel industry for the month of August, according to China Securities Journal, a state-run financial publication.

Financial statements released by China Steel Association indicated that profit fell by 98.9 percent compared to the 7-month period from January to July last year for medium and large steel companies in China. Shen Wenrong, chairman of the largest private steel company in China told Xinhua “The profit gained from selling one ton of steel is less than the profit from selling one dish of fried pork.” l

China’s large scale steel company Baoshan Iron & Steel Co. posted an announcement admitting that the Luojing Project, which the company purchased at 1.4 billion RMB to expand productivity, has been stopped temporarily in order to avoid bankruptcy, according to a Sept. 27 report in China Securities Journal.

According to statistics from Goldman Sachs, the price of iron ore has dropped from $138 per ton to $87 per ton globally since the beginning of 2012 to the end of August. This has had a major impact on the price of iron ore in mainland China, according to Investor China.

On Sept. 27, the deputy secretary general of the Metallurgical Mines’ Association of China, Liu Xiaoliang, said the decline in iron ore prices has caused many firms to face a financial crisis, forcing approximately 40 percent of iron ore mines in China to stop production, according to Oriental Daily, a Shanghai newspaper.

“Iron ore, the commodity most leveraged to China’s growth and Australia’s biggest export earner, is heading for the longest bear market in 20 years,” wrote Australia’s Sydney Morning Herald on Oct. 3.

Chinese industry experts have long considered the steel industry a barometer of the economic health of the nation.

“In the overall industrial landscape of China, the steel industry plays a pivotal role,” according to a International Financial News, a paper sponsored by state-run People’s Daily.

“The performance of the steel industry greatly influences the business of upstream industries such as iron ore and cooking coal, with far reaching impacts on the economic environment of a raw material-exporting country like Australia,” the article continued.

The steel industry also has significant implications for technology, the automobile industry, and the real estate industry, which, in China’s current growth model, effectively drives the whole economy.

As the Chinese economy took a turn for the worse this year, the slowdown of the real estate industry resulted in reduced demand for steel.

Wu Xichun, with the China Iron and Steel Association, said the steel industry is in a quagmire because of the four trillion yuan investment plan launched by the government in 2008, in an attempt to stave off the global financial crisis. That flood of money resulted in overproduction of steel, leading to a glut.

Read the original Chinese article.

[email protected]

The Epoch Times publishes in 35 countries and in 19 languages. Subscribe to our e-newsletter.

Click www.ept.ms/ccp-crisis to read about the most recent developments in the ongoing crisis within the Chinese communist regime. In this special topic, we provide readers with the necessary context to understand the situation. Get the RSS feed. Who are the Major Players?


Source:


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!


Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST


Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover -  Reduces Smart Meter radiation by 96%! (See Video).

Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.