Although Chinese steel market is now stepping into the off season, it is believed that steel price will enjoy the last rise in 2010 due to the pushing force of strengthening expectation of inflation, high level prices of materials and ordering pike at the end of the year.
Rising iron ore gives steel price further support
Ever since the beginning of this year, iron ore has started its year long process of price rise. More specifically, the first three quarters all encountered huge price hike, while the price has finally declined by 10% in the Q4. However, the decline has been offset by the strong demand in China`s market for iron ore materials. It can also be predicted once the future demand of steel increases, the price of iron ore will increased even more.
Shrinking inventory has helped to soften market pressure
Ever since this March, social inventory of construction steel in China has begun to decrease, and the current inventory level has declined by 43.6% on the basis of March, which is the yearly low.
Therefore, China’s steel enterprises have chosen to bring up factory price to adjust to high cost.