Bloomberg citing Mr Xu Lejiang chairman of Baoshan Iron & Steel Co China’s biggest steelmaker as saying that China’s steel prices will fluctuate at a low level this year because of the industry’s overcapacity.

Mr Xu said during the Boao Forum in southern Hainan province that “It’s unrealistic and also against market rules to expect steel prices to continue the fast rising pace of the last five years. It’s the time to restructure China’s steel industry as the production capacity is huge, causing excessive supply over demand. He said that the country’s existing steel capacity is sufficient to support China’s industrialization and promotion of living standards in the future. We’ll never see an annual production growth of 20% again like that in previous years.”

Mr Xu also calls for a “reasonable and sustainable pricing mechanism” to be shared by steelmakers and upstream iron ore industries.

According to Beijing Antaike Information Development Co, Benchmark steel prices in China have dropped 9 percent since February.