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Varied Opinions of Chinese Steel Mills and Distributors on 2011 Market

https://en.steelhome.com [SteelHome] 2010-11-02 11:04:48

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 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.


(To contact the reporter on this story: sbc@steelhome.cn or 86-21-50585368)
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