China Steel Output Falls 2.3% in 2015,

First Drop in Over 30 years

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SHANGHAI: China's crude steel output fell 2.3 per cent to 803.8 million tonnes in 2015 from the previous year, government data showed on Tuesday, the first drop in more than three decades as the economy of the world's top producer slows. Production also declined 5.2 per cent to 64.37 million tonnes in December from the year before, according to the numbers from the National Bureau of Statistics, dented by faltering demand. China's government is pushing to erode overcapacity in the steel industry, as the country aims to shift economic growth towards more consumption rather than heavy investment. The nation's massive steel sector is said to have a surplus capacity of about 300 million tonnes. China's crude steel output is expected to decline for a second straight year in 2016 on continued weakness in demand, according to a government study. "We would expect output to fall further this year, as the government is aiming to solve overcapacity and step up structural reform in supply," said Yu Yang, an analyst with Shenyin & Wanguo Futures in Shanghai. Steel prices tumbled over 35 per cent in 2015, which has already forced many Chinese mills to slash output or shut permanently, with little indication of a strong rebound in steel demand. China's economy grew 6.8 per cent in the fourth quarter from a year earlier, the weakest since 2009, suggesting that the world's second-largest economy continued to lose steam late in the year. Article by Reuters

Steel - A Sector Being Driven to Transform

The outlook for the global economy is mostly positive with growth picking up in the US, India and Southeast Asia, while several emerging markets are experiencing a deceleration in growth. However, the structural shift in the transitioning Chinese economy could cap this momentum. Countries and businesses are becoming increasingly interdependent through trade, INVESTMENT and FINANCIAL systems across the world. The risks and opportunities in the steel business are getting larger in scale and impact, with their sources becoming more diverse and global. Real Growth Is In Being A Truly International Player EY - Real growth is in being a truly international player To survive and thrive, in a sector in constant transition, steel makers need to transform themselves. Globalization is no longer a matter of choice; steel businesses’ long-term success depends on it. The businesses that ride the next wave of growth will be those that understand the trends and refine their strategies, business models and portfolios according to a truly global mindset. The steel producers must find the right balance between globalization and customization.

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