Chinese steel market remains under great depression

Because of the weak demand, Chinese steel market prices continue to decrease.

Rebars in 16mm to 25mm was priced at CNY 3530 per tonne in Shanghai market down by CNY 50 and the price in Beijing was CNY 3550 per tonne down by CNY 30.

What’s more, Ansteel reduced the EXW prices for November as well for both HR and CR by CNY 300 per tonne.

However, it is useless to stabilize the market by reducing the price, as the weak demand and high inventories exist. It is predicted that the profit in fourth quarter may be declined.

On the other hand, the steel price in China has reduced by thousands of yuan, but many steel factories express that they will not cut the production. The reason why they decide to do so is that the production cost has reduced a lot compared with before, and they will have profit to produce. Wuhan Iron and Steel Plant and other big steel manufactories said they will not reduce the production but the loss. To the small factories, the cost will be much higher if they close the blast furnace now. In addition, small ones are more flexible to the market change.

According to the present production level, the supply will be suitable only the demand rises up by 20%, which is almost impossible.

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Source: www.steelprices-china.com (Friday, 16 Oct 2009)