Chinese steel industry expecting no immediate rebound- 07 Jun 10

According to the latest information, one of the main Chinese steel mills, Baosteel will significantly lower the price of all species of steel in July, especially automobile steel, which makes Chinese steel industry believe that there will be no market rebound in the first half of the year.

Sharp decline in orders for Chinese steel mills

In June 3rd, Baosteel July price policy has caused intense attention. In the not yet officially announced file, automobile steel price and high tensile steel price will fall by17%, meaning a decline of CNY 1300 per tonne; SPCC will have a decline of CNY 400 per tonne; hot roll, HDG and pickling will all fall by 10%, meaning a decline of CNY 400 to 500 per tonne.

Baosteel plan to cut price can sufficiently reflect the order cut of the whole Chinese steel industry. Some insiders tell the reporter that orders for all kinds of steels have been falling ever since May, especially automobile steel orders.

No market rebound in the first half year

Industry insiders think that Baosteel price cut will have a deep influence on the long term market psychology, although Baosteel products are rarely put into market directly. Once the policy is publicized, the price decline in June is then a foregone conclusion.

Moreover, because of different adjusting stages, individual steel mills will cut price at different times and under different conditions, making the price fall an endless course. Therefore, it is impossible that the Chinese steel market will rebound in the first half of the year.

Jun 7, 2010 16:14
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