It is reported that China domestic steel price is likely to fall back in October on fading positive impact of the energy conservation policy and resumption of production in some steel plants despite of the slide in crude steel output before long.
As per report, affected by the sprint of energy conservation and emission reduction before the end of 2010 domestic price of construction steel surged from CNY 4000 per tonne to CNY 4400 per tonne in less than 10 days in early September marking record high within 2010. However, the high price only maintained two days and dropped to CNY 4260 per tonne due to lack of support of perpetual positive impact and laggard demand.
Analysts hold that a steel sale in August-September was basically in line with expectations and is expected to maintain at high level in October. Release of steel demand may steadily decline in October. Besides, steel supply was decreased by the sprint of energy conservation and emission reduction. However, a growing number of steel plants have resumed production since late September, which means steel stocks may pile up and thus increase supply pressure in domestic market.
At the meantime, the disparity in steel price in south market and north market would aggravate the trend of transporting steel from north to south. In terms of raw materials, domestic refined iron ore market remained stable while imported iron ore market continued sliding slightly with gloomy turnover, but quoted price for imported iron ore has not shown sharp declines. Since China decreased imports of iron ore, freight charges of major shipping route dropped one after another.
Insiders predicted that steel sales in October may not be able to outstrip that in September. Sliding raw material prices would not give strong support to steel price in short term. In addition, the reassertion and strengthening in real estate control would impose some impact in steel market, and steel price may fall back to CNY 4000 per tonne in October.