Economic Slowdown Hits China Steel

 

Steel tubing used for scaffolding sits outside a construction site supporting a billboard showing the Beijing city skyline on September 2, 2012. China's Baoshan Iron and Steel Co said operating profit slumped 59.8 percent from a year earlier to 2.72 billion yuan in the first half of the year due to weakening demand and declining steel prices in China as the domestic economy slowed. (Image credit: AFP/Getty Images via @daylife)

China’s slowing economy means less building and less building usually means less demand for steel.
China’s steel production declined in August along with steel prices according to data from the National Development and Reform Commission, or NDRC. The data was released on Thursday, actually.
Crude steel production fell 1.7 percent year on the year in August, contrasting with the 13.8 percent growth recorded during the same period last year, the NDRC said in an online report translated from the Chinese by the Xinhua news agency.
In August, the average price index that measures China’s domestic steel products averaged at 104.39 points, pulling back 7.64 points from the previous month and down 30.78 points from a year earlier, according to the NDRC. In the first eight months, China produced 481.57 million tons of crude steel, up 2.3 percent year-on-year. The growth represented a drop of 8.3 percentage points from the growth seen a year earlier, NDRC said.
Steel makers are struggling.
Industry profits dropped 48.3 percent year on year to 79.3 billion yuan ($12.5 billion) during the January-July period.  Shares of China Steel Corporation in Taiwan (TPE:2002) are down 7.3 percent on the year.  Hebei Iron and Steel Corp., China’s biggest steel maker, saw its share price decline 19.23 percent year to do on the Shenzhen exchange.