1. According to the latest data released by National Bureau of Statistics of the PRC, Chinese crude steel output was 803.83 million tons in 2015 decreased by 2.3% year-on-year, which was the output drop for the first time since 1981.

MPI's comments: Chinese crude steel output was 803.83 million tons in 2015, and net export was 99.62 million tons. Thus Chinese steel consumption was 664 million tons in 2015 decreased by 5.4% year-on-year. The actual consumption is a little bit smaller than MPI’s forecast, showing more serious deterioration than expectation.

2. On the basis of reports published recently, total liability of Chinese steel industry is more than 3 trillion yuan, debt ratio of steel companies is about 70% on average. In the third quarter of last year, Bayi Steel, a listed steel company even showed debt ratio of 100%.

MPI's comments: Many steel companies confronted with serious loss due to rapid deterioration of the steel industry in recent years. More and more enterprises separated steel business since 2015. Overcapacity elimination has already been deemed as the first priority of five tasks of structural reform of supply front. And staffing and debt disposal are difficulties to be solved by the steel industry complying with overcapacity elimination.