China's steel production could eventually shrink by 20 percent, a top executive of industry giant Baosteel Group said Wednesday, after the country's economic growth hit a six-year low.
"If we extrapolate the previous experience in Europe, the United States, Japan, their steel sectors have all gone through painful restructuring in the past, with steel output all contracting by about 20 percent," Bloomberg News quoted Baosteel chairman Xu Lejiang as saying.
"China will eventually get there as well, regardless how long it takes," Xu told reporters at a forum in Shanghai.
China has a huge steel glut, with Bloomberg reporting that a domestic industry group estimated output at 823 million tonnes last year.
The industry recorded losses of 18 billion yuan ($2.8 billion) in the first eight months of this year, Xu said, reversing a 14 billion yuan profit from the same period a year ago.
Steel output was down 2.1 percent year-on-year in the first nine months of 2015, according to China's National Bureau of Statistics.
China's economy logged its worst performance since the global financial crisis in the third quarter with gross domestic product growing just 6.9 percent -- its slowest rate in six years, the government said on Monday.
Baoshan Iron and Steel Co., the main listed unit of Xu's group, closed down 3.81 percent in Shanghai on Wednesday.