The situation of steel oversupply will be further aggravated next year, pointed out a recent report released by the Group of "China Industrial Development-Tracing Research under the State Council Development Research Center, the cabinet's think-tank, according to Xinhua on November 30.

The group predicts that steel demand will reach 336.85 million tons in 2006, continuing to fall in growth compared with that of 2004 and 2005. On the other hand, the steel supply will rise to 453.36 million tons in 2006 after the continued release of production capacity, resulting in a surplus of 116.51 million tons, according to People's Daily on December 1.

The contradiction between supply and demand will make profits of the iron and steel industry fall in a bigger margin.

By People's Daily Online