Chinese steel and cement output to rise as power limits ease

Chinese steel and cement output to rise as power limits ease
Published: 26 November 2010

China International Capital Corp said China production of steel and cement will increase next year, weighing on prices as power supplies are restored, according to a Bloomberg report.



Mr Luo Wei an analyst with China International Capital Corp said: “The capacity that has been idled because of power limits will resume operation in January and may cause a drop in prices of the building materials.”



Mysteel Research Institute said provinces including Hebei, Shandong and Zhejiang restricted power to plants from September to meet energy usage targets. The cuts may trim steel supply through the end of the year by 9.6 per cent.

Local governments have yet to say when supplies will return to normal. 

Mr Luo said cement prices may fall 15 per cent in the first quarter next year from the current quarter. Cement production capacity is gradually being restored this month in Zhejiang and other eastern Chinese provinces.