http://www.steelorbis.com/steel-news/latest-news/cisa-chinas-steelmaking-capacity-may-exceed-1-billion-mt-by-end-2012-723825.htm

CISA: China’s steelmaking capacity may exceed 1 billion mt by end 2012

"China's steelmaking capacity may exceed 1 billion mt this year. Overcapacity is still the biggest problem the Chinese steel sector faces," Wang Xiaoqi, deputy chairman of the China Iron and Steel Association (CISA) has stated.

Mr. Wang pointed out that overcapacity in China's steel sector has gone far beyond reasonable dimensions and impacts negatively on Chinese steelmakers as well as traders and leads to vicious competition. Furthermore, he said, due to oversupply it is not possible to reflect the price increases in raw materials, such as iron ore, in domestic finished steel prices.

According to a CISA survey, by the end of last year China's steelmaking capacity had reached 970 million mt, while the country's steelmaking capacity is likely to break the threshold of 1 billion mt by the end of this year. Based on an estimated average crude steel daily output of 1.93 million mt for the current year, the total crude steel output in China will be 720 million mt in 2012, with a capacity utilization rate below 72 percent.