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China won't flood the world steel market, Macquarie Bank says

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  • China won't flood the world steel market, Macquarie Bank says

    China won't flood the world steel market, Macquarie Bank says
    Source: Bloomberg



    See also:
    Steel Board
    Steel CatalogChina, the world's biggest steel producing nation, won't flood global markets with the metal in the next five years, said Jim Lennon, a metals analyst at Macquarie Bank Ltd. in London.

    China's net steel exports will be 5 million metric tons this year, Lennon said, or less than 0.5 percent of global supply. The net export balance will grow to 14 million metric tons next year, Lennon estimated. Global steel production surpassed 1 billion tons for the first time last year.

    "I don't see China destroying the global steel market," Lennon, executive director at Macquarie commodities research, said at a conference in London today.

    A surge in Chinese steel production has raised concern about an oversupply of the metal, used in everything from refrigerators to cars. That's prompted producers such as Mittal Steel Co., the world's biggest steelmaker, to announce production cuts to shore up prices that have fallen 26 percent in Europe this year.

    The Bloomberg World Iron/Steel Index, which tracks the share prices of the world's 50 largest steelmakers, has declined 11 percent this year.

    China's steel production this year will rise 22 percent to 335 million tons, Lennon said. The nation's crude steel demand will be 330 million tons. Production will rise 10 percent to 370 million tons next year, outpacing demand of 355 million tons.Global steel production will rise 5.9 percent to 1.12 billion tons this year, Lennon estimated. He didn't give a forecast for global steel demand.

    Global production will increase 3.9 percent to 1.16 billion tons in 2006, 3.5 percent to 1.2 billion metric tons in 2007, 4.5 percent to 1.26 billion tons in 2008, 4.1 percent to 1.31 billion tons in 2009 and 4.4 percent to 1.36 billion tons in 2010.
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