China's steel industry must consolidate: analyst

Jun 22, 2012 | 08:45 AM | Catherine Ngai

Tags  Steel Success Strategies conference, Accenture, John Lichtenstein, catherine ngai

NEW YORK — As the Chinese steel industry slows down, major consolidation efforts and foreign markets will play a role in sustainable growth in the Asian nation, according to John Lichtenstein, managing director of Accenture Plc’s global metals industry practice.

"This is a really interesting time for the steel industry in China," Lichtenstein told AMM on the sidelines of the Steel Success Strategies XXVII conference in New York co-sponsored by AMM and World Steel Dynamics Inc. "After over a decade of rapid double-digit growth ... market growth has stopped, at least in the short term. Meanwhile, the momentum from all the capacity growth continues."

A large majority of Chinese steels mills lost money in the fourth quarter of 2011 and the first quarter of 2012, Lichtenstein said, which led mills to reconsider their strategies. "It was an awakening type of experience. You’ve suddenly got people talking about improving operations and profitability," he said. "They’re discussing how to shift the focus from growth to making stronger, sustainable enterprises."....