Platts cited Mr Liu Haimin a research fellow at the China Metallurgical Industry Economic Development and Research Center while speaking at the 2009 China Steel Market Outlook Annual Conference in Shanghai on December 6th to 7th as saying that China"s steelmaking industry is expected to continue to benefit from low manufacturing costs in the long run.

Mr Liu said that “In the next two to three months, China"s domestic steel prices are expected to recover so as to keep afloat at least large and medium sized steel mills.”

He also predicted that “China"s steel industry would see further consolidation in the next one to two years but the steel industry"s overall profits would remain low. He said that steelmaking raw materials represents around 48% of the total steelmaking costs in China, up from around 37% in 2003. Meanwhile, fuels represent around 25% of the total steelmaking costs, little changed from in 2003. Steelmaking costs in China are thus heavily contingent on raw materials and fuels costs.