Baosteel’s President: Steel Overcapacity Is Only a Bit Over

President Hsu of China Iron and Steel Association (CISA) and Baosteel said on a directors meeting of CISA held on August 3 that the current steel industry shows only a slight overcapacity. He added, “Overcapacity is a common issue faced by Chinese manufacturing industries, especially the steel industry, which is deemed as the very cause of the difficulties. In my opinion, I think I should stand out to clarify some points. In terms of the capacity utilization, the scale of Chinese steel industry is not only large but also flexible, so if the utilization comes to 80%, the capacity can be considered fully utilized.” He also thinks that there was no over capacity in China before 2006 and the slight overcapacity has been there since 2006. “The 75%-80% capacity utilization is slight overcapacity; 70%-75% capacity utilization is medium overcapacity; the capacity utilization below 70% is severe overcapacity.” Experts from the steel industry explained that the current capacity utilization of Chinese steel industry lies in 70%-75%, so the overcapacity is at a slight-to-medium level.