China's Baosteel expects nationwide output cuts this year
By Amy Lv and Lewis Jackson
BEIJING (Reuters) -China's biggest listed steelmaker, Baoshan Iron & Steel Co, said a nationwide output cut was likely this year and flagged external pressures on an industry that is already grappling with overcapacity and faltering demand.
The company, known as Baosteel, is a subsidiary of the state-owned China Baowu Steel Group, the world's largest steelmaker by output.
"Chances for a cut are high as it has been mentioned in the government report," Cai Yanbo, Baosteel's deputy general manager, said at the company's first-quarter results briefing on Monday when asked about market talks of cutting 50 million metric tons of Chinese crude steel output this year.
Cai, however, added that he did not expect cuts to "be implemented this month or next month; we have appealed to relevant authorities to avoid one-size-fits-all approach while controlling output".
An output cut of such scale would help rebalance the steel market, underpinning steel prices and weighing on prices of steelmaking ingredients.
Beijing has said it plans to restructure the steel industry through output cuts, without elaborating on details such as the timing and scale for such cuts.
China's steel exports in 2025 will slide by around 15 million tons amid tariff hikes and indirect steel exports will be slashed by 20 million tons, according to Zou Jinxin, Baosteel's chairman.
Exports of manufactured goods such as containers, vehicles, and engineering machinery are typically classified as indirect steel exports.
Zou said he expects Beijing to roll out more stimulus measures to counter external shocks.
China's steel exports hit a nine-year high of 110.72 million tons in 2024.
Baosteel's steel exports hit a record high at 6.07 million tons last year, but the company did not specify its 2025 target.
Domestic steel consumption in 2025 will fall by 2%, Zou added.
Baosteel reported a 26.4% annual increase in its first-quarter net profit, helped by lower costs.
Shares at Baosteel jumped by 5.7% to 7.02 yuan ($0.9622).
($1 = 7.2956 Chinese yuan)
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