Chinese steel is on the verge of a serious and new crisis
reported by Mehr News, Bao steel group in China in the position of the world’s largest steel manufacturing unit compared to the steel industry of this country facing a more serious crisis than the recessions of 2008 It warns until 2015. According to Hu Wang Ming, who presided over the semi-annual meeting of Baosteel, it seems that the upcoming crisis will be longer and more severe than what the Chinese steelmakers predict.
According to the Bloomberg report, this Chinese steelmaker produces about seven percent of the world’s steel and the release of such a message by this company can cause concern for its competitors in Asia, Europe and North America, these competitors are now trying to cope with the new wave of Chinese steel exports. Beausteel focuses on reducing risks and suggests that financial institutions at all levels pay more attention to investment security and increase control over this matter, receiving payments Suspending and identifying fake transactions are solutions that Bao suggests and emphasizes that liquidity is more important than profit in a crisis.
The steel company also notes that China’s steel market is showing several negative signals. The stagnation of the real estate market and the decrease in the activity of factories this year has given a downward trend to domestic demand, and the price of steel products has fallen to the lowest level in the past few years and has affected the factories.
China’s steel industry suffered a devastating downturn during the global financial crisis of 2008-2009 and again in 2015-2016, however in both periods the crisis was helped by stimulus. which the authorities applied on a large scale would be solved, but adopting a similar approach this year does not seem very realistic, and therefore the Chinese authorities are trying to reform the economy.
China’s steel units are reducing production and meanwhile the price of steel products in the domestic market is falling. The iron ore reserves of this country are increasing and the price of raw materials is decreasing. China’s steel exports are approaching 100 million tons per year and are at their highest level since 2016. China’s steel market position also has global consequences; Iron ore prices are falling, China is ramping up steel exports and global trade disputes are escalating.
