High Energy Costs And Falling Steel Prices Causing Steel Makers Profit Eroding
This is a great article in Oil Price.com. China with its high energy costs and falling steel pricing is causing big financial problems. Covid and the War in Ukraine is pushing steel makers toward bankruptcy.
By Ag Metal Miner – Oct 18, 2022, 3:00 PM CDT By Sohrab Darabshaw
Is it all doom and gloom for Chinese steel manufacturing? It’s hard to tell at the moment. Indeed, China finds itself in a precarious place financially. What’s more, a sizable section of global financial and stock analysts have predicted the crises will only get worse as the country prepares to face its toughest winter yet.
But that is only half the story. A financial downward spiral hit the Chinese economy hard. Among the most widely hit industries are its steel and iron ore sectors. The present crisis started about a year ago. That’s when a leading Chinese property developer, Evergrande, announced that it could no longer support some $300 billion in liabilities.
While that alone was enough to set off a panic, the Chinese authorities’ reaction time only worsened the situation. A few months ago, the Chinese government announced a fresh fiscal stimulus. However, many experts say it was too little too late. The country’s industries were already reeling from a fresh COVID-19 outbreak, frequent power cuts, and the Ukraine invasion.