China steel output falls first time since 1991

Steel output in the world’s largest producer posted the first annual contraction in a quarter century. Mills in China, which make half of global supply, churned out less last year for the first time since at least 1991 as local demand dropped, prices sank and producers struggled with overcapacity.

Crude steel production shrank 2.3% to 803.83 million metric tonne, the statistics bureau said on Tuesday. December output fell 5.2% to 64.37 million tonnes from a year earlier. Demand is weakening as policy makers seek to steer the economy away from investments toward consumption-led growth.

The economy expanded 6.9% last year, the slowest full-year pace since 1990, data showed. Steel output will probably drop 2.6% this year, weakening the outlook for iron ore as global miners increase shipments. This marks the start of declining steel output in China as the economy slows,” Xu Huimin, an analyst from Shangai, said.