China Economic Times citing an analyst with the state council development research center as saying that steel consumption and demand in China have presented some recovering signs while the global economy may not get rid of the crisis effects entirely until in a certain period.
The analyst said in January to February, China produced a totaled crude steel output of 102.892 million tonnes up by 25.4%YoY due mainly to reviving downstream demand, partly to completion of the maintenance starting last year end by some enterprises, and to acceptable profit margin despite squeezing from hiking materials cost, while pointing out that it has yet to see fundamental change in downstream demands and suggesting massive additional production will push up the stock and lend pressure on supply and demand balance.
In January to February, above designated industries added production value grew 20.7%, 16.9 percentage points higher than the comparable figure of last year, the main steel consuming sectors all presented positive growth in production, such as engines, tractors, railway carriage and automobile. In the meanwhile, steel export is constrained to some extent with slow recovery of global steel demand and comparatively fast production in local regions yet. And the steel export is also checked because of trading protectionism. The analyst warned it will take time for the world economy to get full life back.
Following points the paper mentioned are the positive.
1. Positive financial policy and moderately loose monetary policy should be continued
2. The nation is carrying on stimulus measures for rural development, which is expected to support steel demand
3. Improvement in world economy is helpful to expanding China export
4. The materials price rise is playing an increasing role of solidifying steel price.