China steel market still under pressure

Baoshan Iron & Steel Co , the listed unit of China's largest steelmaker, said on Wednesday it expected the domestic steel market to remain under relatively heavy pressure with no fundamental turnaround in demand from key steel-using sectors.

"The company's downstream orders have recently improved compared with the last quarter, but they have still fallen markedly from a year earlier," the company said in an e-mailed response to Reuters queries.

It added that a three-month delay in the restart of its No. 1 blast furnace, which had been shut until mid-November for maintenance and resumed output in February, reduced its pig iron production by about 1 million tonnes.

China's steelmakers have been struggling with a sharp drop-off in demand as economic growth cools, and many cut production late last year in response to falling domestic prices.

POSCO sees January steel sales down 27 pct

South Korea's POSCO , the world's No. 4 steelmaker, expects its January steel sales to fall by around 27 percent to 1.9 million tonnes, hit by faltering demand, its chief financial officer said on Tuesday.

"We produce and sell around 2.6 million tonnes every month but sales are seen falling down to around 1.9 million tonnes this month (due to weak demand)," POSCO CFO Lee Dong-hee told reporters on the sidelines of a steel industry gathering.

POSCO plans to update its 2009 production plans on Thursday when it announces its fourth-quarter results.

Jump in steel exports helps industry clear stockpiles

Price stability in the global market has helped Indian steel manufacturers clear stockpiles through exports, which bounced back in quantity by an impressive 36% in December 2008, though sales realizations remained a big worry for the industry.

Steel exports reached 2.29 lakh tonnes in December reversing from a negative trend in November when exports had dropped to 1.8 lakh tonnes from 2.4 lakh tonnes in October, official sources said.

They attributed recovery in exports to price stabilization and withdrawal of 15% export duty on long steel products, besides restoration of tax refunds (DEPB) for the sector in the October-November period.

Though prices stabilizing around 550-600 dollar per tonne have generated some buying interest, sales realizations have remained quite low. Prices had peaked to 1,200 dollar per tonne in June 2008 resulting in a windfall for the industry.

However, the industry is a long way from seeing a revival in demand. "In the midst of the global economic downturn, the demand for steel plummeted in the international market," Steel Secretary P K Rastogi said.

For the April-December period, steel exports have declined by 24% to 2.7 mn tonne from 3.5 mn tonne in the comparable period of last fiscal. With the automobile and construction industries reeling under the global downturn exports for the flat products dropped by 25% in April-December over the year-ago period.