November 22, 2008

Steel prices in China to move up further in future - Analyst

According to Mr Xiao Ping an analyst with Mysteel, domestic steel prices in China would not fall for long but still bear an uptrend for the future.

Mr Xiao put the price movements into the context of ceaseless inflation in China which has given a push to the offers. US subprime mortgage crisis and quick depreciation of the dollar both boosted oil price onto new highs and intensified worldwide inflation, thus leading to soaring prices of the resource products.

According to Mr Xiao the global steel prices nearly gained 60% from the start of the year. But the prices in China have not yet peaked. He said that people concern about possible economic decline and strained financing for the downstream users. But even if it slows down, the speed would be quite limited, given the internality of China's economic development stage and the government's will.

He added that as to capital strain and the phenomenon of the compressing demand, regulations will be able to change, while all enterprises would tend to pass on the additional cost to downstream industries in midst of the inflations.

Mr Xiao said as seen from supply, further shortfall of electricity availability due to the hot summer and Olympics Games would consequentially impact steel production. Before new export curb policy is released, if any, domestic supply of steel products will be tight and the prices be fairly firm.

(Sourced from MySteel.net)