China’s Baosteel Sees Nationwide Output Cuts This Year

China's biggest listed steelmaker, Baoshan Iron & Steel Co., said a nationwide output cut is likely this year and highlighted external pressures on an industry already grappling with overcapacity and weakening demand, Amy Lv and Lewis Jackson reported for Reuters.

There was recent market talk of Baosteel cutting 50 million metric tons of Chinese crude steel output this year. I Photo: Xinhua

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," said Cai Yanbo, Baosteel's deputy general manager, at the company’s first-quarter results briefing, in response to questions about market talk of cutting 50 million metric tons of Chinese crude steel output this year.

Cai added, however, that he did not expect cuts to "be implemented this month or next month. We have appealed to relevant authorities to avoid a one-size-fits-all approach while controlling output."

A cut of that scale would help rebalance the steel market, support steel prices, and weigh on prices of steelmaking inputs. Beijing has stated its intention to restructure the steel industry through output cuts but has not provided details on timing or scale.