BEIJING, March 13 (Xinhua) -- Steel prices in China are expected to rise amid fluctuations in March as the demand has improved a lot and environmental protection efforts have capped supplies, said Wang Guoqing, director of the Lange Steel Information Research Center.
However, due to the rising cost of raw materials such as iron ore and coke, the room for steel mills' profit improvement will be limited, Wang noted.
Lange Steel estimated that the domestic steel mills will see profits from the per metric ton (tonne) of steel rise by in a range from 30 yuan to 50 yuan, after the country’s cut in its current value-added tax (VAT) rates from 16 percent for manufacturing industry to 13 percent.
Wang said that the tax cuts will help the steel enterprises to effectively reduce manufacturing costs and sales costs, and the savings can be used more for their transformation and upgrading, and enhance their production efficiency and competitiveness.
In terms of the social stocks of the steel products, Lange Steel data shows that on March 8, the social steel stocks in 29 key cities nationwide were 16.239 million tonnes, a decrease of 191,000 tonnes or 1.2 percent week on week, showing the improving market demand.
The improving demand can also be seen from the daily turnover of the Beijing building materials market monitored by Lange Steel. Data shows that since March, the daily turnover of the building materials market in Beijing has climbed to 9,500 tonnes, an increase of more than 2,000 tonnes over the same period last year.
In terms of the steel-making cost, as prices of the domestic iron powder, imported iron ore and coke rose by 3.5 percent, 14.7 percent and 1.8 percent, respectively, in February, the steel production costs tend to rise in March, leaving the room for steel mills’ profits limited in March, said Wang. (Edited by Hu Pingchao, hupingchao@xinhua.org)
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