China's Baosteel expects nationwide output cuts to fix market imbalance
China's biggest listed steelmaker, Baoshan Iron & Steel, 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.
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'Chances for a cut are high as it has been mentioned in the government report,' deputy general manager Cai Yanbo 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'.
Baosteel, as the subsidiary of state-owned China Baowu Steel Group is known, said an output cut of such scale would help rebalance the steel market, underpinning steel prices and weighing on prices of steelmaking ingredients. China has said it plans to restructure the steel industry, without disclosing the timing and scale of production cuts.
China's steel exports in 2025 will slide by around 15 million tons amid tariff hikes, according to Zou Jinxin, Baosteel's chairman, while indirect steel exports will be slashed by 20 million tons. Exports of manufactured goods such as containers, vehicles, and engineering machinery are typically classified as indirect steel exports.
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Zou said he expects Beijing to roll out more stimulus measures to counter external shocks.
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