China's steel industry  which  is the world's largest crude steel production in  two kinds of four-fifths of the world, consuming half of the world's iron ore. It has in the global iron ore market of great significance. When the rest of the world iron and steel products into the encounter in 2009, 2 months into the Chinese iron and steel industrial production rebounded in November Since the January 2009 production and import growth, signs of an economic downturn in 2008 led to a number of market observers believe that China's steel demand is picking up. However, the short-term price increases seems to stimulate, rather than through physical recovery expectations. Real gross domestic steel demand is still sluggish, and the steel stocks re-established. In the iron ore spot prices fell again, since late February. Vale do Rio Doce, Rio Tinto and BHP Billiton is the world's three major iron ore from Australia and Brazil iron ore producers who account for 70% of global iron ore trade, therefore, faced with enormous pressure, a reduction in contract price in 2009 after six consecutive increases for one year. However, they postponed the date and look forward to re-

Although raw material prices were lower in 1Q, medium and large Chinese steel mills still posted RMB 3.31 billion losses due to plunging finished steel prices, a marked contrast with profits as high as RMB 47.2 billion during the same period of 2008. China's crude steel output was 126.72 million mt in 1Q 2009, with total 2009 output expected to be 506.86 million mt, and will likely create a serious supply surplus. CBI believes Chinese steel mills will continue to operate at a loss during 2Q, although downstream demand is expected to recover gradually during this time. International trade protection measures have recently strengthened, creating a tough trading environment for China's steel exports. CBI believes no significant improvement has been reported in China's domestic steel supply and demand conditions as of the end of April, despite sharp declines in trading inventories during March and April. Shougang Group has accelerated its efforts to merge with or acquire companies, an indication of its strategic aim to maintain production advantages for long products.

China Metallurgical Industry Planning Research Institute, vice president of new-found Lee on the 11th in the fifth and steel industry development strategy seminar production and demand of steel products, China Iron and Steel Industry Structure of the existence of excess capacity and severe, iron ore resources and the low level of maritime security , do not have a strong capability of independent innovation, etc. issues. However, China as a global steel production and consumption centers and the world's major iron and steel exports will not change the status of the country, before the industrialization in China is still the growth in steel consumption trends. Chong Li believes that China's iron and steel to the existence of the owners of seven aspects: First, the structure of excess capacity and severe, in particular the existence of a large number of backward production capacity. As of the end of last year, China's crude steel production capacity reached 660 million tons, exceeding the actual demand of about 100 million tons; Second, self-innovation capability, advanced production technology, R & D and application of high-end products also rely mainly on the introduction