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PrintChina Ministry of Commerce expects domestic steel prices to keep low in the near future amid the soft market demand and excessive reserves of steel plants.
Steel prices in the last week (November 10~19) fell by 2.7 percent, 0.9 percentage point more than the drop rate of the previous week.
October saw an average steel price of 4,739 yuan/ton, down 16.4 percent from September. And the price has dropped below the level of last year's same period by now, according to statistics from MOC.
Under the influence of the global financial crisis, China now faces a further economic slowdown. Output cut or growth downturn of major steel-consumption industries such as internal combustion engine, automobile, tractor and industrial boiler, as well as the gloomy real estate market, have resulted in a weakening steel demand on the market.
Besides, most steel sales enterprises also regard export reduction in the manufacturing industry and oversupply of steel products as the reasons that curb steel prices.
Further, price adjustment of steel plants usually lags behind the market price changes, which leads the selling prices to drop away from the factory prices of almost 80 percent of the surveyed enterprises.
Currently, the steel prices are shaking to the bottom and won't be able to come up in a short period, said Chen Kexin from Distribution Production Promotion Center (DPPC). He also predicts that steel prices will keep low in 2009 but may pick up at the end of 2009 or in 2010.
Editor: Ivy
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