Steel market remains dim prospect on weak demand and idle capacity
China's steel market was not yet in sight of recovery as shrinking exports and overcapacity continued, officials from the China Iron and Steel Association (CISA) said.
Luo Bingsheng, CISA's executive deputy director, said at a conference on Monday that the rise in steel prices from December to February was not a sign of recovery. The country's steel market would remain subdued this year because of shrinking demand and huge capacity, he added.
CISA vice secretary general Qi Xiangdong put the rise in prices down to an increase in stockpiling.
"The financial crisis and the domestic economic slowdown resulted in contraction in both overseas and domestic markets", Luo said, noting China, the world largest producer and consumer, was facing many uncertainties.
The lingering financial crisis dragged the world economy into recession.
Many steel-consuming industries were seriously battered, especially construction, automobile and shipbuilding, which caused a steep drop in steel demand and therefore eroded China's steel exports, the Beijing Lange Steel Information Research Center said.
According to the General Administration of Customs, China exported 1.91 million tons of rolled steel last month, a decline of 2.22 million tons, or 53.8 percent, from the same month of 2008. The steel exports were also 1.26 million tons, or 39.7 percent, below the December level.
The prospect is not upbeat as the World Steel Association forecasted the global demand for steel would fall more than 10 percent in 2009 year on year. The Republic of Korea (ROK) and the U.S., the main importers of China's steel, would post declines of 9.5 percent and 10 percent in 2009, respectively. Japan's demand for the first quarter would slide 31.6 percent.
He added the RMB’s appreciation also helped weaken the competitiveness of China's steel products. Additionally, there emerged growing concerns over trade protectionism worldwide.
The global economic turmoil also hurt China's economy, driving it down to a 9 percent growth for the whole year in 2008.
For further information please visit
www.chinametalbiz.com
E-mail:
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
