Bloomberg quoted a trader said Chinese demand for cold rolled steel products, used to make cars and appliances, is exceeding domestic supply and depleting inventories, underpinning prices that have gained 9% this year.
Mr Cui Jianhua chairman of Shanghai Baiying Iron & Steel Group said inventories in South Korea and Japan are also at low levels.
He said that “China will add about 9 million tonnes of cold rolling steel capacity this year, increasing supply by about 15%. Still, that isn’t enough to meet demand from auto and appliance makers.”
Mr Cui said Baoshan Steel will fulfill about 90% of customers demand for cold rolled steel in May up from 70% in April.
Mr Zhang Fuyin deputy director of steel business at China Railway Materials Corp one of China’s three biggest steel traders said demand for cold-rolled sheets may start to slow from May, a traditional low consumption season.