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Steel mills lose more in March

CHINA'S major steel makers posted a combined net loss of 1.8 billion yuan (US$264 million) in March as oversupply ate into prices.

That was more than the 1.51 billion yuan loss in the first two months combined, the Shanghai Securities News reported yesterday, citing Luo Bingsheng, vice chairman of the China Iron and Steel Association.

Crude steel output in China reached 1.416 million tons on a daily basis in the first quarter, or 517 million tons annualized, far exceeding the government's target of 460 million tons, Luo said during an industry conference.

Daily output rose to 1.455 million tons in March, 36 percent higher than November's low, said Jia Yinsong, an official in charge of the raw material division at the Ministry of Industry and Information Technology, yesterday.

"It's a formidable task for China's steel sector to turn profitable," Jia said on the ministry's Website.

China accounted for 47.9 percent of the world's production in January and February, Jia said, a rise from a 38-percent share in 2008.

The growth in production occurred at a time global steel makers were cutting output amid a recession.

Wu Xichun, the honorary chairman of the steel association, said small mills are to blame. All the 72 major mills tracked by the association cut production in March, but smaller ones, mainly in north Hebei Province, increased output, Wu told the same conference.

He urged the government to allow market forces to quicken consolidation and phase out smaller and inefficient mills.


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