Baoshan Iron and Steel Corp, China's largest listed steel producer, has no further plans to cut production following the closure of its 550,000-ton-per-annum Baotong plant, a company official said on Thursday.
"Apart from Luojing previously and Baotong now, the company currently has no plans to further cut production," said Zhu Kebing, the company's chief financial officer, at an online investor briefing to discuss its third-quarter results.
Baosteel announced late on Wednesday that it suffered net losses of 920.5 million yuan ($145 million) in the third quarter of this year, its first quarterly loss in nearly three years, with domestic steel prices at decades-long lows.
The firm said in its earnings report that the Baotong plant had "entered the production suspension phase" and that Baosteel was "preparing to make provisions for asset impairment" in the fourth quarter.
Its results reflected a dismal performance in China's steel sector.
China Iron and Steel Association Vice Chairman Zhu Jimin said Wednesday at a briefing that output cuts were the only way the sector could reverse its current decline.
Baosteel's general manager, Dai Zhihao, said he expected Chinese steel capacity, currently saddled with a surplus of more than 300 million tons, to shrink steadily in the next few years, but progress was unlikely to be quick.
"Although new production capacity construction has been restricted well, the elimination of existing capacity has been held back for various reasons and it is hard to be optimistic," he said.
Dai said China's steel sector was still in a trough and would only gradually emerge in one or two years after a period of restructuring.
"The steel sector was undergoing severe adjustments in the third quarter, with consumption remaining weak as the country's macro economy was sluggish," Baosteel said.
