Fortescue CEO sees "strong growth" in steel production in China

In the midst of worries about the state of the Chinese economy, the Australian mining company Fortescue sees a robust steel production from the country.

"With regard to China, what we have really seen, especially in the first quarter, is strong growth in steel production," said Elizabeth Gaines, CEO of Fortescue, at "Capital Connection" of CNBC.

China is the largest steel producing country in the world. Data from the World Steel Association show that the country's share of global crude steel production has risen from 50.3% in 2017 to 51.3% in 2018.

"Last year, China produced a record 928 million tons of crude steel, an increase of 9.9% in March." We expected that, according to In discussions with our customers in China, steel production is increasing by about 3% to 4%.% … this year, "said Gaines.

In addition, stocks of iron ore in Chinese ports have been reduced to 136 million tonnes – the lowest level since October 2017 – she said.

The Fortescue executive said there may be "some slowdown", but the demand for iron ore by sea was "very strong".

Gaines comments follow Tuesday's release of China's purchasing managers' indices, which show the country's manufacturing sector is growing slower than expected.

The April 15 Caixin / Markit Purchasing Managers 'Index was 50.2, which is lower than the March reading of 50.8 and the 51 badysts' forecasts in a Reuters poll.

The results of the Caixin private investigation came after the National Bureau of Statistics of China published the official manufacturing PMI for April, which rose from 50.5 to 50.1 in March. Analysts polled by Reuters were expecting this indicator to remain at 50.5.

PMI values ​​above 50 indicate expansion, while those below this number indicate contraction. The official PMI survey typically surveys a large portion of large enterprises and state-owned enterprises, while the Caixin indicator includes a larger number of small and medium-sized enterprises.

Earlier in April. Beijing has announced better-than-expected economic growth for the first quarter of 2019. The GDP report indicates that the world's second largest economy grew 6.4% year-over-year over the past three years. first months of this year, exceeding the 6.3% that badysts polled by Reuters had forecast.

– Yen Nee Lee of CNBC contributed to this report.