Masteel aims for modest output increase in 2019

China's state-controlled Maanshan Iron and Steel plans a modest 1.4pc increase in crude steel output in 2019, as it expects steel demand to be lower this year on the back of weaker economic and real estate sector growth and a complex global trading environment.

Masteel, China's ninth-largest steel producer, expects to produce 19.92mn t crude steel this year compared with 19.64mn t in 2018.

Anhui-based Maanshan's output of long products in 2018 increased by 1.66pc at 9.08mn t, while its flat products output fell by 0.75pc at 9.4mn t. Wheels and axle output increased by 11.92pc at 216,000t.

Flat products demand from automobiles, machinery and home appliances industries are likely to be lower in 2019 compared with a year earlier, Maanshan said in its annual report released today.

A continued impulse to increase production capacity in violation of laws, resurgence of sub-standard steel products and the lingering pressure from the rapid release of capacity from compliant companies were listed by Maanshan as some of the risks to its market performance this year.

While China officially shut down all induction furnace-based steel capacity in 2017, there remains concern among large-scale steel mills that such sub-standard long products may still be produced illegally by small operators.

"The cost pressure caused by the rising prices of raw materials and fuels and the surge in environmental protection operating costs is increasing," said Maanshan.

Maanshan's 2018 profit was higher by around 44pc from the previous year at 5.93bn yuan ($880mn), while its revenues increased by 6.48pc to Yn76.87bn.