Steel product prices on the Chinese market may fall in the
second half of 2007, industry insiders predicted in a conference
recently.
Overcapacity and trade disputes will force steel product prices
down in domestic market, experts said at the 2007 Steel Market and
Trade Conference held in Guangzhou, capital of south China's
Guangdong province.
"Supply and demand in the domestic market maintained a subtle
balance last year," deputy general manager Jia Liangqun of Mysteel,
a steel information website, explained.
The country's crude steel output surged by 18 percent annually
to 419 million tons in 2006 and was expected to reach 475 million
tons or even higher in 2007, according to official data.
China's apparent consumption of crude steel amounted to 384.05
million tons last year, while domestically-made steel products
accounted for a record 95.82 percent of China's steel market last
year.
"We can expect a price decline in China if exports are limited,”
Jia said. "Supply far exceeds domestic demand, which is too high to
speed up any further."
China exported more than 43 million tons of steel products in
2006, an increase of 109.58 percent from the previous year, making
it one of the world's major exporters.
Shortages of steel products on the international market were
likely to come to an end in the second half of this year, warned
Peter Marcus, managing partner of World Steel Dynamics.
Meanwhile, overseas markets are under pressure to limit China's
steel exports.
"We hope China can limit its exports to Europe from five million
tons in 2006 to two million tons in 2007," said Gordon Moffat, a
director of Eurofer, a European steel-makers association.
The fast increase in iron and steel exports triggered trade
disputes with China's trade partners. Altogether 11 countries had
launched 27 anti-dumping and anti-subsidy investigations against
China in 2006, mainly involving the United States and the European
Union, the main export markets.
According to Zhang Guobao, Vice Minister of the National
Development and Reform Commission, the Chinese government would
formulate a policy to cut the rate of export rebates for some steel
products to curb exports.
"Steel product prices will remain stable," Luo Bingsheng,
vice-chairman of the China Iron and Steel Association, said. "We
will coordinate our members if there are extreme fluctuations."
(Xinhua News Agency March 29, 2007)