OF MEPS CLAIM THAT CHINA’S STEEL OUTPUT IS UNDERSTATED
In 2011, MEPS reported its belief that
the National Bureau of Statistics figures for China’s crude steel production
understated the actual output by approximately 6 percent. This fact was
subsequently acknowledged by a senior member of the China Iron and Steel
Association but no action appears to have been taken in the interim to change
Recently, Mr Xu Lejiang , Chairman of Baosteel Group, is reported to have stated
that China’s crude steel production, in 2013, was 822 million tonnes. This was
further reinforced in a recently published article by Mysteel, that an unnamed
source had disclosed that up to 70 million tonnes of steelmaking capacity is
unreported. By contrast, the latest figure issued by the country’s National
Bureau of Statistics is 785 million tonnes.
Mr Xu’s assessment of crude steel output, in 2013, is broadly in line with MEPS
latest calculated minimum figure of 815 million tonnes, published in the latest
issue of MEPS CHINA STEEL REVIEW. Perhaps the disclosures from the two local
steel sector experts will generate action from the authorities responsible for
providing production statistics for the steel industry in China.
It is not satisfactory to have doubts about the accuracy of steel production
statistics – particularly, for a country as large as China’s with its importance
to the global mining sector and steel supply. Moreover, how can the authorities
make meaningful decisions about investment, rationalisation, emissions control,
privatisation issues etc for an industry in which there is no consensus about
the most basic statistic – the level of output?
It is even more surprising when one considers the amount of analysis that takes
place, almost on a daily basis, about the industry. Production from a part of
the industry is reported three times every month. Percentage changes are
analysed to two decimal places and the results reported in the press.
Steel prices are collected and published daily by a number of different
organisations. We see futures contracts for steel products and raw materials.
All this activity takes place with no concern for the accuracy of the industry’s
Why do the authorities allow this situation to continue? MEPS highlighted the
problem three years ago. It has now been confirmed by two steel industry
insiders. It is not surprising that the sector was allowed to over-invest in
steel manufacturing when the authorities fail to monitor accurately the size of
a key matrix - the country’s output.
China Steel Review - August Edition
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