Xu Lejiang, chairman of China's largest steelmaker Baosteel Group claimed that China's steel industry may post a loss for 2009 as overproduction persists in a weak global market. Players remained cautiously optimistic about the recent recovery that has lasted for the fifth week as of last week. Mills have been under pressure due to the surge of some imported steel products with a lower price than that of household ones and overcapacity.

Xu said China produced 500 million tons of steel products from a total capacity of 650 million tons last year, which indicated that the problem of overcapacity has become more than prominent. It was the financial crisis that has led to an earlier outbreak of the problem and made it more profound in its implications. It is impossible for the industry to grow at an annual rate of 20 percent as it used to be, he added.