The China Iron and Steel Association (Cisa) has forecast that steel consumption in China will fall by 5pc in the first quarter of 2020.
Present steel consumption has declined, while stocks have increased, on the back of the Covid-19 infection which has had a huge impact on the country’s trade, business and logistics.
Construction projects, across different sectors are temporarily on hold.
While not revealing any numbers for the above, Cisa is calling on Chinese steel plants to “organise production according to orders”, and to “control production accordingly”, to meet market challenges.
The challenges the iron and steel industry are facing have been listed out by Cisa as high inventory, limited logistics and low steel demand, all of which is resulting in forced reduction of production.
Cisa has proposed the drawing up of a policy to solve these issues, which will include looking at sales, exports and logistics.
Cisa noted that steel companies in Shanxi, Jinan, Sichuan and Gansu province have adopted measures to reduce production.