It is reported that Wuhan Iron & Steel Group, China’s third-biggest steelmaker, plans to boost output by 24 percent next year as demand recovers from 2009, which it said was the toughest year in the company’s history.
Wuhan Steel expects to produce 37.9 million metric tons of crude steel in 2010, up from a forecast 30.5 million tons this year, it said in a statement on its Web site today. The group aims to earn 150 billion yuan ($22 billion) in revenue next year, it said.
China’s $586 billion stimulus spending has boosted steel demand from automakers, home-appliance manufacturers and builders. The measure helped domestic steelmakers return to profit in May after seven straight months of losses because of the global economic crisis.
This “has been the most difficult year in our history,” Wuhan Steel said. “The economy is improving, but there isn’t a fundamental turnaround. We should grasp the opportunity to overcome the impact of the crisis.”Wuhan Steel’s listed unit gained 0.1 percent to 7.86 yuan as of 11:21 a.m. local time in Shanghai trading, compared with a 0.3 percent decline in the benchmark Shanghai Composite Index.
China’s steel output may exceed 600 million tons next year, after reaching a record 570 million tons this year, the China Securities Journal reported Dec. 17, citing Ma Guoqiang, general manager of Baoshan Iron & Steel Co., the listed unit of the nation’s largest steelmaker.
Rising steel demand and prices in China, the largest producer of the alloy, led analysts to predict higher prices of raw material iron ore and coking coal next year. Macquarie Securities Group forecast a 30 percent gain in iron ore prices and Citigroup Inc. predicted domestic coal prices in China may rise 14 percent.
Still, a severe steel oversupply in China has overwhelmed demand, leading to high inventories, Wuhan Steel Group’s general manager Deng Qilin said Oct. 14. China is studying a “more feasible” plan to tackle steel overcapacity, the Ministry of Industry and Information Technology said this month.
It was said from the statement that Wuhan Steel also will progress with its 10 million ton steel project in the southern province of Guangxi and a plan to build a steel plant in Brazil.
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