China's major steel mills report rising losses

BEIJING - Almost half of China's large- and mid-sized steel mills reported losses during the first nine months of the year, the China Iron and Steel Association said Wednesday.

Combined losses amounted to 26.73 billion yuan ($4.24 billion), marking a 41.5-fold increase in losses year-on-year. Last year's losses were 644 million yuan.

The steel companies' sales fell 6.49 percent from one year earlier during the first three quarters, due to a slowing economy and oversupply, said Wang Xiaoqi, vice-president of the association.

China's apparent consumption of steel rose 2 percent to 510.28 million tons during the first nine months, slower than the 11.73-percent increase seen in the same period last year, data showed.

Demand has softened in the world's largest steel-producing nation since the start of the year, as the country scaled back investment in rail construction and property development amid a slowing domestic economy.

"The steel industry is facing continued challenges because of weak steel prices and a rebound in iron ore costs," Wang said.

However, Wang predicted demand recovery in the fourth quarter with the implementation of pro-growth measures rolled out by the government. These included more aggressive fiscal spending, structural tax reduction, monetary loosening and State-run sectors opening to private capital.

"Steel prices rose slightly in late September, showing signs of a recovery in the steel market. Demand may improve in the fourth quarter," he said.