CRU: Baosteel hints at output cuts in China

Cai added he did not expect cuts to be implemented this or next month as the company has appealed to the relevant authorities to avoid a one-size-fits-all approach while controlling output, Reuters news agency reported.

Baosteel’s chairman Zou Jinxin said the country’s steel exports will be around 15 million tons lower this year in response to higher import tariffs. The 110.7 million tons Chinese producers exported last year was a nine-year high.

Zou also predicted domestic steel consumption will fall 2% this year and the government will introduce more stimulus measures to counter external shocks.

The senior managers were commenting after Baosteel reported a 26.4% year-on-year increase in Q1’s net profit to RMB2.43 billion yuan ($333 million, €293 million).

“Despite the challenges of weak demand and falling steel prices, the company managed to lower costs thanks to a more drastic fall in coking coal prices than steel,” it said in a Shanghai Stock Exchange filing, citing metallurgical coal down 36.1% compared to steel down 9.9%.

The major steel maker gave a bearish outlook.

“In 2025, the external environment will become more complex and uncertain and the risks of trade tensions will remain prominent … profitability will face persistent downward pressure from the mismatch between supply and demand.”