It is reported that steel price in domestic market stops decreasing and temporarily stabilized recently owing to the state"s policy and price fall of raw material. Since end October steel price keeps relatively stable, especially on November 21st price index jumps by 2.1% from last week.
Analysts said that the state"s policy to encourage domestic demand has stimulated real estate industry. Thus, construction grade steel price edges up. Secondly, due to steelmakers" output reduction, the demand of raw material shrinks, leading to its price plunge and ease mill"s pressure meanwhile. At last, a batch of middle and small producers start to enlarge domestic iron ore purchase as they have already used up their stocked resources. Therefore, industry insiders are optimistic on future market temporarily.
Mr Sun ming revealed that, at present, such middle and small enterprises as Zunhua Jianlong Steel, Handan Zongheng Steel and Hebei Jinxi Steel plan to resume production in December. Those mills are relatively flexible and they do not have much iron concentrate storage. Hence, they begin to purchase with orders. Currently, they prefer to purchase at home market as it is much convenient. In addition, negotiation for 2009 iron ore price has been postponed. Although sport price of imported resource is a little bit lower than that of domestic one, more users take material from domestic suppliers.
Steel price in the domestic market is expected to warm up in the early of December. However, it can not last for a long time and the market will remain weak in the future.