1. According to the latest data released by China Iron and Steel Association (CISA), key steel companies made sales revenue of 2.67 trillion yuan from January to November 2015, decreased by 19.3% year-on-year. These companies lost 53.132 billion yuan with sales margins of -2% from January to November 2015, while profit made by them was 24.387 billion yuan in the same period of last year with sales margins of 0.74%.

MPI's comments: The steel industry suffered from low profitability due to oversupply. The steel companies must understand the market situation clearly and prepare the development plan complying with capacity reduction for survival. Chinese steel consumption is going down after a peak round.

2. According to the latest PMI released by CFLP Steel Logistics Professional Committee, PMI of the steel industry in December 2015 was 40.6%, 3.6 percentage points up than that of November, which has been out of a low level in the past seven years.

MPI’s comments: In 2016, some steel companies running under continuous deficit will quit the market more rapidly. More and more large/medium scale steel companies will carry out merging and restructuring. Thus the concentration rate of the steel industry will be improved further. Overcapacity elimination and improvement of industrial concentration are good for healthy development of the steel industry over the coming years.