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Steel prices on the rise

01-18-2011 14:00 BJT

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Steel prices in China have been on the rise since the start of January. The hikes come at a time of year usually known for sluggish demand.

January normally means a time of sluggish demand for steel supply, and therefore lower prices. But this year, things are different.

According to Lan'ge, steel prices in Beijing, Shanghai and Guangzhou have been consistently rising since the start of 2011. Some prices have gone up by as much as 200 yuan per ton.

Ma Li, Analyst of Lan'ge said "It's true steel prices have been on the rise recently. But trading is mainly between dealers, and only a small amount of steel have gone to buyers. I think current price rises are due to dealers' expectations for higher prices after the Spring Festival, as well as the recent price hike of major steel makers."

Analysts say steel manufacturers are raising prices to address growing costs.

Data shows China's major steel makers, including Baoshan Steel and Wuhan Steel, have hiked product prices by 100 to 200 yuan per ton. Smaller manufacturers like Shagang Steel, Liuzhou Steel and Guangzhou Steel have also raised prices by 30 to 50 yuan per ton.

Analysts say, as this year is the start of China's 12 Five Year Program, steel demand will increase dramatically. That's due to the start of massive infrastructure projects including welfare housing and high speed railways.

Analysts also attribute the recent price rise to global inflationary expectations, and relatively low stock levels across the country.

Editor:Xiong Qu |Source: CNTV.CN

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