Steelmakers may cut production on weak demand

SHANGHAI - Chinese steelmakers are likely to cut production in the third quarter because of "weak" demand from auto and appliance makers, according to the nation's second-biggest mill.

Slower demand may prompt smaller makers to default on iron ore contracts in the third quarter, Baosteel Group Corp Chairman Xu Lejiang said on Tuesday at the Bloomberg Businessweek Green Business Summit in Shanghai.

"Many steelmakers will cut production or carry out maintenance in the third quarter," Xu said. "Steel demand from automotive and home appliance industries has become weak. Iron ore costs will be the highest in the third quarter."