China's Shougang Group plans to maintain its crude steel output at 33 million mt in 2014 amid uncertainties on steel prices, a company source said Friday.
The state-owned steelmaker has six 2,500-cubic meter blast furnaces at Caofeidian, Qian'an and Qinhuangdao in North China's Hebei province, and another 14 units across its four subsidiaries in southwestern Guizhou province and northeastern China.
Shougang Group has an annual crude steel capacity of 35 million mt, but it produced 33 million mt of crude steel last year, the source said.
He explained that the company was maintaining stable output for 2014, compared to 2013, due to concerns of a credit crunch that would impact consumption. This situation also made it difficult to forecast steel prices.
"Demand for steel is not looking good this year as credit availability is tight, but we can only have a clearer picture of the overall situation after Q1 2014, so we are now planning to keep our planned target at 33 million mt, steady from last year," the source said.
As the steelmaker plans to keep its crude steel output unchanged this year, it does not seek to increase its 2014 contractual supply of feedstock.
According to the source, over 65% of the company's iron ore requirements are currently secured via term contracts, spot purchases and local ports, with the rest from the steelmaker's domestic and Peruvian mines.
"Over 65% of our iron ore needs are based on our contractual agreement with the foreign miners, we have no plans to change that weightage this year," said the source.
Shougang Group produced 31.4 million mt of crude steel in 2012, making it the 30th largest producer in the world, according to data from the World Steel Association. The steelmaker produces long and flat steel products.
