Shanghai Securities News reported that domestic demand for steel products would continue to be perched on a comparative high level in coming several years, bolstered by the industrialization and urbanization paces, but the periodical structural steel making oversupply has become a very serious problem in China steel industry at the present stage.

According to the report, especially for construction steel may face a serious oversupply problem in 2 to 3 years leading the whole steel market to move with fluctuations in a long run.

In recent two years, most construction sites were in full-loaded production on a rapid growth in market investment. Due to the 4 trillion economic stimulus packages, many mid and long term projects have completed the basic construction in advance, although the present steel making output capacity rate approached to 80%, market demand may sharply shrink in later periods and the oversupplies in construction steel market would be more and more serious at that time.

(Sourced from Shanghai Securities News)