China's steel industry has entered a hard time after seven years of rapid expansion, and a turnaround is unlikely until the second quarter of next year, according to Qi Xiangdong, deputy secretary with China Iron and Steel Association.

Slackening demand at home and overseas has hit the country's 71 major steel makers, said Qi.

Their profit totaled 126.8 billion yuan (US$18.5 billion) during the January-October period, down 0.93 percent from a year earlier.

Forty-two large or medium-sized steel companies posted losses in October. The combined losses reached 7.8 billion yuan.

The proactive fiscal policy and moderately loose monetary policy as well as the central government's efforts to boost domestic demand and fixed asset investments would all have a positive impact on the development of the steel manufacturing industry in 2009, Qi said.

Last month, China unveiled an estimated 4-trillion-yuan stimulus package as part of its bid to offset adverse global economic conditions by boosting domestic demand.

The money is to be spent over the next two years to finance programs including low-income housing, rural infrastructure, water, electricity, transportation, the environment, technological innovation and rebuilding from several disasters, most notably the May 12 earthquake.

Although the elimination of export duties on 67 types of steel from December 1 would help cut the cost of exports, Qi expected steel exports to slump next year due to dwindling global demand.

(Xinhua News Agency December 8, 2008)