Steel prices Soaring in China

Tao Dong, chief economist for non-Japan Asia at Credit Suisse, is quoted by the South China Daily Post as saying there was no evidence yet to call the latest development (the rise in steel prices) a fundamental improvement in end-demand for steel.

 

Oversupply Still in Effect

 

The general oversupply situation in China’s steel industry has not changed, he said, a view MetalMiner had confirmed in an interview with a Shanghai steel trader who cannot be named as he is not authorized by his firm to speak to the media.

 

“The big rise in price is very unusual,” he said. “I remember only two cases. One was in 2008-09, the other one is now. There is a general confidence here in the Chinese market growing, due to government support, but the big rise in steel prices this time is more a short-term response to the easing of lending rules and policy announcements made at the recent Chinese People Political Consultative Conference in Beijing. In my own opinion, the price will come down to the level it should be within two weeks.”