China’s Steel Industry Bleeds, Prices Collapse, Losses Mount, and Now the Government Gets Gloomy

[marmar]

China’s Steel Industry Bleeds, Prices Collapse, Losses Mount, and Now the Government Gets Gloomy
by Wolf Richter • December 9, 2015

[font color="blue"]“A risky strategy.”[/font]

Steel, which goes into nearly everything from skyscrapers to cookware, has become symbolic for what ails China, the world’s largest consumer of it. After years of colossal manufacturing and building booms, soaring demand for steel, and ballooning steel-making capacity, everything has curdled.

The average price of steel in China has collapsed 30.6% so far this year, after having already fallen four years in a row: 7.8% in 2011, 11.6% in 2012, 7.6% in 2013, and 16% in 2014, according to data from Beijing Lange Steel Information Research Center, cited by the People’s Daily, the official newspaper of the Chinese Communist Party.

Despite the crashing price, steelmakers have raised production: 881 million tons in 2011, 951 million tons in 2012, 1.07 billion tons in 2013, and 1.13 billion tons in 2014.

And just then, China’s miracle build-it-and-they-will-come, overstimulated, debt-bloated economy began plowing into a slowdown. According to data from the China Iron and Steel Association (CISA), steel consumption has begun to fall: down 3.4% to 738.3 million tons in 2014.

Steel consumption is likely to fall even more this year – now that new construction has caved, down 13.9% through October, that investment in the real estate sector is languishing, and that auto manufacturing was getting mauled, with sales plunging below last year’s level during the summer. ....................(more)

http://wolfstreet.com/2015/12/09/chinas-steel-industry-teeters-prices-collapse-losses-mount-and-even-the-government-gets-gloomy/

[Wellstone ruled]

1. Timberrrrrrrrrrr!!!!

Can you say collapse.......... Another house of cards built by Wall Street to fleece the Populace.

[DetlefK]

2. The opposite of Wall Street built this. For opposite reasons.

China's government expanded its economy so fast and so much because they wanted to get every chinese citizen a decent-paying job.

Economic and environmental consequences be damned.

Why should every chinese citizen get a job?

Because a citizen with house, job and family is a complacent citizen. Because he has much he could lose.

Economic satisfaction is what binds the Chinese to the communist regime. (In interviews, you always hear the same story how these policies lifted them out of poverty.)

If there were a notable unemployment and poverty, the Chinese would start demanding political change. Just imagine: 10, 20, 30% of the population openly demanding a new economy. And "new" would mean an economy where 90% of corporations aren't owned by the government.

[Wellstone ruled]

4. Understand the the Chinese Government wanting to

do Economic Expansion. This prevents another Mao from taking over and a bloody mess. Are they not just delaying a revolt by their citizens by propping up a allusion.

[DetlefK]

3. I wondered when this bubble would burst and how.

I read conflicting articles on this. One expert said that China would have to scale down its growth to deflate the bubble before it bursts. Weeks later I read an article how China ramped up growth...

And now China has steel-producing jobs it doesn't need and steel it can't sell...