Cement and steel

From an earlier post:

China’s construction infrastructure, for example, is grotesquely overbuilt – from cement kilns, to construction equipment manufacturers and distributors, to sand and gravel movers, to construction site vendors of every stripe. For crying out loud, in three recent years China used more cement than did the United States during the entire 20th century! That is not indicative of a just a giddy boom; it’s evidence of a system that has gone mad digging, hauling, staging and constructing because there was unlimited credit available to finance the outpouring of China’s runaway construction machine.

Consider the case of China’s mammoth steel industry. It grew from about 70 million tons of production in the early 1990s to 825 million tons in 2014. Beijing’s tsunami of cheap credit enabled China’s state-owned steel companies to build new capacity at an even more fevered pace than the breakneck growth of annual production. Consequently, annual crude steel capacity now stands at nearly 1.2 billion tons, and nearly all of that capacity — about 65% of the world total — was built in the last ten years. Needless to say, it’s a sheer impossibility to expand efficiently the heaviest of heavy industries by 17X in a quarter century.

One Response to “Cement and steel”

  1. Neil Says:

    Over ten times the steel production capacity of the U.S.! Of course, all of the U.S. production is good quality–I wonder how much of Chinese production is reliable enough to be useful?

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