Long steel product analysis--Regional highlights: China

摘要

Domestic prices in China have risen over the past month on the back of raw materials cost increases, which continue to put pressure on producers. Rising iron ore costs are pushing up pig iron prices and rising billet prices are putting pressure on the margins of rollers, while internal transport costs are also rising. Domestic demand remains strong, particularly in the south of the country, however, and we believe the market will accept these increases in the short term. In northern China the onset of winter is likely to lead to a reduction in construction activity and, as a result, demand will slacken. We believe, however, that the south and east of the country, where demand for rebar often exceeds supply, will take up the slack.