Chinese iron ore mining companies are facing major down growth. In the recent economic situation the price and demand for iron metal has been decreased. In China, less demand of new ships pushed the construction companies to become idle. Ship construction companies hold the top position in iron metal using sector of China. They’re idleness turns the top iron miners to output less in the recent year.
To boost up the demand and maintain the top flow of production Chinese government has already announced proper initiative. A few days ago, Beijing approved a $160 billion project in infrastructure sector. It’s definitely happy news for the iron ore miners but somehow they didn’t seem as happy they should be.
In the last steel industry conference officials mentioned their doubt about the initiative. They told, to regain the productivity building of several highways, ports or airports aren’t enough. As the price is low one of top steelmakers of China Baoshan Iron & Steel Co had suspended their production in the Shanghai Plant which gave around 3 million ton output every year.
Baoshan Iron & Steel Co was the first company to announce their suspension. Hebei Iron & Steel Group another major steelmaking company announced their lower production in the conference. More and more other major companies are following the footstep and suspending their production.
Though Chinese companies are suspending their production but world’s top iron miner Vale SA of Brazil is expecting the situation will change soon china. They predicted the output will increase 3-5% in the next year.
Government’s infrastructure project will be helpful to keep up the demand a little high but it isn’t enough. If the present price range stays for few more times and the demand keeps low many more company will have to suspend their production. That can make a quite negative impact in Chinese socio-economic condition.