Chinese steel production to fall

From the AFR:

Chinese steel production will fall over the next three years, according to figures released at a major iron ore conference on Thursday.

The Deputy Secretary-General of the Metallurgical Mines Association of China, Liu Xiaoliang, forecast that by 2015 China would demand only 705 million tonnes of crude steel.

That is a fall of around 2 per cent from this year, when China is expected to consume around 720 million tonnes of crude steel.

Something like this is my base case. Which means the iron ore price is headed under $80 in the medium term and it’s going to stay there. That is the mining boom going bust.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.