COLUMN-Has China's steel juggernaut run out of road?: Andy Home
(The opinions expressed here are those of the author, a columnist for Reuters)
By Andy Home
LONDON Feb 18 (Reuters) - Everyone's talking about "peak steel".
Zhang Guangning, chairman of the China Iron & Steel Association, (CISA) started it, when he told the Association's annual conference in January that "China's steel sector has already entered a period of peaking and flattening out."
Anodyne sounding words they may be but they have generated shock waves that are still reverberating in news headlines and analyst notes around the world.
Because China, the engine of global steel production and consumption, is not supposed to have reached the stage of "peaking and flattening" yet.
Iron ore miners such as Rio Tinto and BHP Billiton would not have invested billions of dollars in lifting supply, if they thought demand for their product was already topping out in what is their biggest single customer.
Sure, a slowdown in the breakneck speed of the Chinese steel juggernaut was expected but "peak steel" certainly wasn't expected until some time in the next decade.
So is Zhang right? Because if he is, it's very bad news indeed. For China's steel sector. For iron ore miners. And for the rest of the world too. Continuación...