Thursday, July 15, 2010

Depressed outlook for Chinese steel production & pricing

A recent survey of Chinese steel producers conducted by Steel Business Briefing Research and Consulting has found that the majority of mills are pessimistic about steel pricing and production in the coming quarter.

The results published in SBB’s Analytics China report show that a significant majority of the mills surveyed expect Chinese steel demand to be lower in Q3 compared with Q2. Almost half of the expected prices are predicted to decline.

The mills cited uncertainty over government policies, along with seasonal factors as contributing to this dreary outlook on Q3 demand. However government stimulus projects are providing certain stability in demand and this is widely expected to last for at least another year.

None of the mills surveyed expect an increase in exports in Q3, coinciding with a large number believing production at their mill will fall over the July-September quarter, half are planning production cuts as a result of maintenance or poor demand.

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