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Steel makers' net profit plummets in '08

(Xinhua)
Updated: 2009-02-23 19:07

"Clearly there exists excessive capacity," Luo Bingsheng, CISA's executive deputy director, told a press briefing, "Our important and urgent task is to control capacity."

The 10 largest steel companies produced 212.7 million metric tonnes, or 42.5 percent of the total output. The proportion was 5.71 percentage points higher than 2007 because of several industry mergers and acquisitions.

Iron Ore Talks

China imported 443.7 million metric tonnes of iron ore last year, an increase of 60.6 million metric tonnes than a year earlier.

The iron-ore talks on the new fiscal-year contracts, which starts April 1, went smoothly, Luo told reporters, adding the contracts prices would reflect the current demand and supply situation. He declined to disclose details.

China would like to stick to the practice of striking long-term contracts and to see big cuts in iron ore prices, he said. China also hoped the fiscal year for iron ore contracts could start on January 1 as steel firms could better planning their annual production, he noted.

Chinese steel producers opposed the initiative to set up an iron ore price index system to replace the current annual benchmark pricing system, Luo said. "Conditions 'for the proposed system' do not exist."

In general the CISA encouraged and supported steel companies to buy stakes in overseas miners in an effort to secure stable supply of production materials, Luo stated. But he added the businesses did their own analysis and made their own decisions.

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