BEIJING, Feb. 25 (Xinhua) -- Steel prices in China will likely maintain strong in the short term due to the recovery in downstream demand, said some industry insiders.
The domestic steel prices showed a V-shape last week. Specifically, at the beginning of the week, due to poor weather conditions in some areas, some downstream construction sites had not started normally. The relatively slow in demand recovery and the rising inventories weighed on the steel prices. Near the weekend, the steel futures generally rebounded and some mainstream steel mills also showed the willingness to prop up prices, which pushed up the steel prices, according to the latest market report provided by Mysteel, a domestic steel information provider.
The report showed that in the construction steel market, the average price of mainstream rebar varieties in major cities nationwide was 3,982 yuan/metric ton (tonne) last week, down 27 yuan/tonne on a week-on-week basis. In the plate market, the average price of mainstream hot-rolled coil products in major cities was 3,823 yuan/tonne, up 12 yuan/tonne on a week-on-week basis.
Relevant institutions believed that the recent steel prices have approached the cost line of the steels for storage in winter. Meanwhile, some steel mills have recently raised the ex-factory prices of steel products, which made the traders reluctant to lower steel prices. Generally, the production enthusiasm of steel mills is normal; indicating the space for production growth is limited.
Industry insiders note that after the Chinese Lantern Festival (February 19), downstream demands will continue to recover.
In terms of the iron ore market, some still mills purchased ores, according to their demands, and the iron ore prices were relatively weak. As for the imported iron ores, the prices fell slightly. By February 22, the price of imported iron ore at 62-percent grade was 86.70 U.S. dollars/tonne, down 1.1 U.S. dollars/tonne on a week-on-week basis. (Edited by Hu Pingchao, hupingchao@xinhua.org)
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