China's steel industry problems will not be solved quickly, said Li Xinchuang, executive vice secretary of China Iron & Steel Association (CISA). He said overproduction in the steel industry has reached staggering proportions, and the structural adjustment of the country's entire economy only exacerbates the situation in the industry. As Li Sungchuan pointed out, the overcapacity of the steel industry was, "probably beyond our imagination. The sector faced an extremely difficult situation as a result of slowing growth, structural changes throughout the economy and policies to shut down obsolete capacity. However, demand grew gradually, which, together with the desire to increase market share, forced steel mills to increase steelmaking capacity. Overcapacity in the PRC is estimated at 300 million tons, but at the end of 2013 the "Celestial Empire" launched new enterprises with a total capacity of 69.2 million tons. "This problem cannot be solved quickly," Li Xingchuan said. In 2014, China's carbon steel smelting growth rate is expected to slow to 3% at 810 million tons. At the same time, demand for finished steel products this year will increase to 715 million tons, up 3.2% year-on-year. In this case, as of 2013, the total production potential of China's steel mills is 1.04 billion tons of carbon steel.

Source: IIS "Metallosnabzheniye i Sbyt"