On
SteelHome Events: 2011 China Steel Market Seminar, China steel mills and
distributors have varied opinions.
Li
Jianshe, Manager, Marketing Dept, Masteel:
China steel market may swing in a narrow range in the remainder of 2010
till Q1, 2011. He believes a slim chance for a strong rally unless a huge
new development occurs.
First,
China steel production and capacity remain high. Energy saving and
emission reduction affect not only steel industry but also steel-consuming
industries, which means although China steel production reduced, steel
demand also declined.
Second,
China steel mills see rising operating cost on higher coal, electricity,
oil and transportation prices.
On
international iron ore price for Q4, current China steel price stay
basically flat with operating cost. Steel mills have very poor profit.
Moreover, three miners are in great desire to raise price for next
quarter. There is quite little downturn room for steel market to go.
Third,
futures market impact sizably on spot market. There is also slim chance
for futures market to vibrate sharply.
Zheng
Hui, General Manager, Shanghai Guanghe Trading: China
steel market may head down in Q4. Reasons are: a) supply/ demand
development may not reverse in Q4; b) international steel price remain
stable and it would attract China steel products; c) futures price
vibration will bring impact on spot market.
Although
short-term outlook is negative, Zheng estimates that after this round of
decline, steel price may embrace an upward trend next year. Zheng believes
that increasing fix-asset investment and encouraging private investment
will remain driving force of China economy.
Xia
Chun, Director, Marketing Dept, Ansteel: China
steel market may show high cost and high price in early 2011, under the
pressure of inflation.
Zhao
Ju, Assistant of General Manager,
Shougang Sales Company: Flats producers
will have fair profit in 2011 as automobile, machinery, household
appliance industries maintain rapid growth. Distributors will not reduce
inventory level as long as fluent liquidity.
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