Mr Wang Xiaoqi vice chairman of the China Iron and Steel Association said that in the first seven months of the current year China's average daily crude steel output exceeded 2.2 million tonnes and so China's overall crude steel output in the current year is expected to reach 830 million tonnes.

According to the CISA, in the January to July period this year China's apparent consumption of crude steel amounted to 438 million tonnes down 960,000 tonnes or 0.2% YoY while its finished steel exports in this period indicated a significant increase of 36.9% YoY to 49.07 million tonnes.

In addition, in the H1 of the year, fixed asset investments by the Chinese steel industry amounted to CNY 237.5 billion down 7.08% YoY with this decline in fixed asset investment the largest recorded among the 56 industrial sectors in China in the given period.

Mr Wang said that this indicates that expansion of production capacity in China has finally been curbed, which will ease the oversupply situation in the country.

He said that the high growth period for Chinese demand for finished steel has ended and, though iron ore and coking coal prices have moved down, finished steel prices are unlikely to see a significant recovery, which will thereby limiting the steel industry's profit margins.