It is reported that most traders in Xinjiang plan to put off their winter stocking as for the high steel price at about CNY 3,800 per tonne, CNY 200 per tonne higher than the national average price and they are pessimistic about the future market situation.

Winter is an off-season in Urumchi each year and price goes quite low at that time, hence, traders would like to reserve products for great profit. But they dare not purchase this year, said a principle in charge of steel market information in Xinjiang.

 

Traders will rush to reserve steel products only when the purchase price is at least CNY 500 per tonne lower than the selling price in next spring, citing the bank loan interest, storage charges and staff salary. In the past few years, prices in Xinjiang are much lower than that in other provinces, first-tier trader of Bayi Iron and Steel Co and Jiujiang Iron and Steel Company introduced.

 

Winter stocking is to store steel products in winter so as to sell them in next spring with a much higher price. The time period is always lasting from December to next Spring Festival. As the winter time is too long in Xinjiang and during that time, steel demand will shrink by a large amount, therefore, the price is certainly to be the lowest of the whole year and traders are apt to store mixes, hoping to benefit a lot.

 

(Source: http://www.shihua.com.cn)

 

 

 

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