China steel mills will make deeper output cuts this year: analyst

Hong Kong

THE downturn in China's steel industry will intensify this year as output contracts by more than the drop seen in 2015, according to Oxford Economics Ltd.

Poor local demand, stiffer opposition to exports and tumbling prices will combine to spur deeper cuts to output in the world's top producer, Louis Kuijs, Hong Kong-based head of Asia economics, said in an interview. That'll contribute to weaker iron ore prices, he said.

"The demand prospects for Chinese steel companies are pretty meagre, so you'd expect them to cut supply," Mr Kuijs said on Wednesday. "It'll have to fall by more than" last year, said Mr Kuijs, …