Baosteel Still Optimistic on Steel, Only Sees 20% Drop in Output

Bloomberg: China Steel Output May Collapse 20%, Baosteel Chairman Says
China’s steel industry, the largest in the world, is bleeding cash and every producer is feeling the pain, according to the head of the country’s second-biggest mill by output, which raised the prospect that nationwide production may shrink 20 percent.

Losses for the industry totaled 18 billion yuan ($2.8 billion) in the first eight months of the year compared with a profit of 14 billion yuan in the same period a year earlier, Shanghai Baosteel Group Corp. Chairman Xu Lejiang said on Wednesday. Output may eventually contract by a fifth, matching the experience seen in the U.S. and elsewhere, he said.
The comparable period is USA 1930s. If nothing else, protectionism will force much larger cuts, but there's no way China's overcapacity doesn't exceed the excesses in market economies such as Japan and the United States.

Steel is one of the industries responsible for rise in total leverage.

Source: Global Financial Stability Report

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