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China suspends production capacity

According to consulting company Custeel ten Chinese steel plants have suspended work. This is the Shanxi Province. It is located in the northeast of China. The total annual production capacity is 19.7 million. Tons of steel. Stop the blast furnace was observed in the company's Linfen Iron & Steel. It is part of a group of state Taiyuan Iron & Steel Group. The remaining thirteen smelters in the province have become reduced capacity utilization.

Some experts believe that Chinese steelmakers are not going to stop production. And this in spite of the loss ratio in the industry, as rental cost goes down. Assumptions of this kind are based on the existing support for banks and authorities. Despite this crisis tendencies make themselves felt. Gradually reduce the issue of domestic producers of steel products. Information coming from China in recent years, said the closure of very large enterprises. Among them Tangshan Songting Iron & Steel, the annual production capacity of 5 million. Tons.

According to CISA losses observed 100 large and less important companies. For 10mesyachny period, the total loss amounted to more than 6 billion. USD. On the Shanghai stock exchange price of HRB 400 rebar in early December fell below 258 USD / ton. In Beijing reduction, including VAT, it reached nearly 1,700 yuan / ton. According to consulting company Mysteel significant number of distribution companies went out of business. And this trend is observed in the last few months. Other companies reduce the volume of stocks. The volume of unsold products in the steel mills of China invariably grow.

PMI index, which reflects expectations of market participants, dropped to a critical level. According to the results in November 2015 the Chinese steel industry is watching PMI 37 points. At the same time the border between the decline and the rise of PMI considered in 50 points. Relatively new orders in the domestic market in November PMI fell to 29.7. In October, the figure was 37.9 points. At the same time China's steelmakers may not rely on export growth. Most likely, the Chinese steel sector reached a peak point. After its passage conclusion of unprofitable production capacity of acquire a mass character.

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