The future trend of China steel market is becoming increasingly clear.
Following the profit increase of both upstream and downstream industries of steel industry, there is no way the steel industry will maintain the recent small profitability. Therefore, the market price of 2011 will be higher than that of this year.
Take the 5.75mm hot rolled coil as an example, the average price in 2010 is between CNY 4100 per tonne t CNY 4200 per tonne, so the price in 2011 of the same product will at least increase by CNY 300 per tonne.
Surely this prediction is with firm basis. Taking the recent governmental policies in to consideration, the investment habit will maintain the major impetus of the growing demand for steel products. At the same time, the stable development of downstream industry will also support the increasing demand for crude steel.
According to latest study statistics, the demand for crude steel in 2011 will be increased by 50m tonne to reach 650m tonne, up by 8% correspondingly. However, the production capacity in 2011 will only be increased by 20 million, as the development of production capacity is gradually slowed down.
Therefore, the balance between supply and demand in China’s steel market will be better achieved in 2011.