Higher prices for steel products, which started in China in the first half of September, the last time finally disappeared. Quotes have risen more than a month for 300-400 yuan ($48-64) t, stopped his growth. In the last two and a half weeks of market rental rates in the country fluctuate in a fairly narrow range, not showing any clear trends. Leading steel company Baosteel, Hebei Steel, Anshan Steel, Wuhan Steel, Shougang, publishing their prices on November, was limited to a symbolic increase or even left the quotes intact.
In General, the market situation currently does not look too favorable for producers. Average daily steel output in September increased again, whereas the consumption remained at the same level. Distributors actively purchasing steel products at the end of September and early October, again left the market. Finally, in October, conditions have worsened for export. Last month, the volume of exports of the Chinese car reached 5.15 million tonnes, adding more than 900 thousand tons compared with August. However, now the buyers, who had to replenish stocks at low prices, moderate activity. As a result, Chinese companies in the second half of October had to make concessions to international buyers.
However, according to experts, the extreme point of recession is already behind. The GDP growth in China was in the third quarter low of 7.4% and the annual rate is expected to be minimal over the last thirteen years, but in the fourth quarter, experts predict the improvement to 7.7%. The expansion of industrial production in September was 9.2% compared to the same period a year ago, and in the fourth quarter is expected to rise further. According to the company China International Capital Corporate, this year, Chinese banks will give 8.5 trillion. yuan (about $1.4 trillion. yuan) new loans against 7.5 trillion. yuan in 2011. Finally, some progress has been made with the Chinese exports, but, according to the manufacturers, the demand from abroad for certain types of equipment currently 20-30% lower than a year ago.
While the majority of participants in the Chinese steel market does not show much activity in anticipation of two important events ? the US presidential election to be held November 6th, and 18th Congress of the Chinese Communist party scheduled for November 8, which should be replaced by the ruling elite of the country. According to analysts, after the U.S. determined the question of power, American companies will increase their investment activity, and the appointment of the new government in China will also unlock the financing of several major projects.
At the same time, the current situation in the economy of China is a bit frustrating to observers. Here is a slow and gradual improvement helps the poor in addressing key national metallurgical industry the problem of overproduction of steel products. The General view was that the government satisfied the existing situation and will not take new drastic measures to accelerate economic growth. As a consequence, the oversupply of rental in China to continue, and the local metallurgical company will continue to actively seek markets abroad. In just the first nine months of this year Chinese steel exports amounted to 40.9 million tonnes, which is 10.2% more than in the same period a year ago. In total for 2012, this figure could exceed 65 million tonnes.
Victor Tarnavsky
Rusmet.ru
