Possible oversupply of silicon steel may drive profits down in the country

09:33, February 17, 2011      

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Shougang Group, one of China's largest in the business, plans to yield 1.2 million tons of silicon steel in 2011, a proportion three times larger than its output in 2010, according to the group on Monday.

With more and more steel and iron companies reaching the limits of capacity on silicon steel output, industry insiders indicate a surge of oversupply of the resource.

Totalized, the domestic silicon steel output in December 2010 amounted to 514,000 tons, an increase of 9.48 percent on a year-on-year basis, while the total yield in 2010 grew 24 percent, to 5.71 million tons.

This year, output may reach 10 million tons. And judging with regards to consumption necessity of the downstream home appliance industry, the supply of low intensity silicon steel is already transbordering, according to Song Liyuan, analyst from Custeel.com.

Silicon steel, that also goes by names electrical steel, lamination steel, or transformer steel, is a special steel tailored to produce certain magnetic properties, and usually manufactured in the form of cold-rolled strips.

Source: Global Times
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