Forecast of steel price plunge unjustified on firm costs - 20 Aug, 2008
China Securities Journal reported that a gloomy sentiment has swept A-share stock market since June with investors all suspecting steel prices may plunge. Yet, the spot market failed to justify the expectation and it's said the coming busy season could prove little possibility of steel price slump in China.
Continuous, slow steel price downswings in the past two months dimmed the expectation of steel future, leading to some 20% decline in the steel stocks starting August 1st. Meanwhile, the spot market welcomed in a weak season, coupled with giving priority to Olympics, the steel price has gone down from early June.
But according to data from the CISA and Mofcom, the steel prices got peaked in June moved to correct on a high track in July and only slided down some 6% for rebar and 6% to 10% for sheet/plate from the June peak which is considered within a rational range.
The industry insiders said there will be limited downward room given unabated iron ore and coke prices.
