Sunday, July 16, 2006

Steel price forecasts and investment - China update

The Financial Express today provides a most useful status report on steel supply and demand in China, and an interesting perspective on the changing trade flows. Are we to expect a medium term decline in world steel prices? Or will future export behaviour be more restrained? For full report, see:

The story it seems is nothing new to steel - it is the same old steel cycle revisited. Demand growth has driven investment. The resulting new capacity means high current production growth - and even in China the growth in production is now outstripping the growth in demand. So Chinese imports are falling, Chinese exports look set to boom ... and world prices may fall... But more worrying still, is the prospect of investment in China having an adverse knock on effect on investment in other low production cost regions of the world such as India and Brazil ...

Why not let us know what you think?


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