As indicated by a new Swiss Bank report, despite the lack of clarity in steel prices in the Chinese market, most domestic steel producers and traders expect that there will not be much room for decreases in steel prices in the second half of the current year.
The Swiss Bank report predicts that steel demand in China will decline in the second half of 2010 in the context of the sluggishness in the domestic real estate and manufacturing sectors, but will regain momentum at the end of the fourth quarter this year or at the beginning of 2011.
According to the report in question, Chinese producers and traders state that, on the one hand, the steelmaking capacity elimination campaign launched by the Chinese government has yet to have any great influence on domestic supply, while, on the other hand, the government's Western Development Program will activate steel demand, especially for long products, in the long run.