Bloomberg News reports that China’s steel market, the world’s largest, is flashing multiple warning signs as iron ore prices collapse. They write:
The world’s biggest steel producer sounded the alarm about an industry crisis in China that carries the potential to ripple around the globe and plunge the sector into a deeper downturn.
Conditions in China’s steel sector are like a “harsh winter” that will be “longer, colder and more difficult to endure than we expected,” China Baowu Steel Group Corp. chairman Hu Wangming told staff at the company’s half-year meeting, warning of a worse challenge than major traumas in 2008 and 2015.
Global investors are lasered onto China’s struggling economy, even as they also contemplate the possibility of a recession in the US, with the Federal Reserve moving toward interest rate cuts. […]
Baowu didn’t offer much on the causes of the current downturn, focusing on how employees should respond: by preserving cash and minimizing risks.
“Financial departments at all levels should pay more attention to the security of the company’s funding,” a Baowu statement said, with a need to strengthen controls, including for overdue payments and detecting fake trades. “In the process of crossing the long and harsh winter, cash is more important than profit.”
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