Mr Luo Binsheng deputy secretary general of China Iron & Steel Association said that "Steel industry's performance in 2010 will be better than this year.” The secretary-general's prediction is based on the following points:

 

1. China's steel products demand is growing steadily thanks to the country's modernization. According to the historic data, the US consumed 8 billion tonnes of crude steel during its modernization process, but the accumulative crude steel consumption in China has just surpassed 4 billion tonnes. It is estimated that China's annual new-increased crude steel demand is 50 million tonnes to 60 million tonnes. If the growth rate of fixed assets investment in 2010 would surpass 20%, the new-increased crude steel demand will even larger than 60 million tonnes.

 

2. The changes in steel products demand structure will also be favorable for steel industry's performance. In 2008, thanks to the government's stimulus package, the market demand of long products jumped by 28%, while that of flat products rose by only 4%. But as fixed assets investment gradually start to operate fully, the demand of flat steel products will increase substantially.

 

3. Steel prices in 2010 will be higher than this year. In 2008, most of steel prices were fluctuating at low prices level, and the overall industry' sales profit rate posted at only 2.2%. But due to the continuous rising prices of iron ore, coke, freight etc, steel prices in 2010 will rise accordingly.

 

Sourced from MySteel.net