Bloomberg reported that Chinese steelmakers, the largest producers in the world, may cut output by 20% next year even with China"s CNY 4 trillion stimulus plan.

Mr Zhu Jimin Chairman of Shougang"s at a conference said “The steel market needs time to recover even with the stimulus plan. No one can tell how long it will take at the current stage.""

The China Iron & Steel Association said the Chinese government announced the stimulus plan on November 9th to revive growth in the world"s fourth largest economy, and will invest in housing, railways, roads and airports. All Chinese steelmakers were unprofitable in October.

Mr Helen Wang a Shanghai-based analyst at DBS Vickers said “Demand is slowing and inventories are piling up. Steel producers cutting output reflects expectations of lower demand from end users. He said that of a 20% decline in output next year may be exaggerated.""

Mr Feng Zhang JPMorgan Chase & Co analyst said the stimulus plan may revive demand in 2009. He said that “We are in a demand-driven down cycle, with steel prices falling despite negative steel production growth. With a $586 billion stimulus package on its way, we believe steel demand is more likely to recover than contract.""