China Iron & Steel Association estimates at the year start that
's steel production will rise steadily to 520 million tonnes in 2008. However, Mr Xu Lejiang chairman of Baosteel said that the production figure might drop to 480 million tonnes since most domestic steel mills have closed partial or whole of their capacity resulted from the moderating economic growth, export setback and the markedly diminishing steel demand in recent past months. China
Chinese mills generally cut production by 20% to 30% and plunged into losses. Mr Xu predicts the waning demand would help promote domestic steel consolidation, which is a good way to clear up the surplus capacity.
It said that steel mills' production disruption also forced global ore miners to clip output. And spot ore sitting at domestic ports has witnessed further price drop last week. FMG, the third biggest ore explorer in