China's steel market to continue seeing sluggish demand before Spring Festival
SHANGHAI, Jan. 12 (Xinhua) -- The sluggish demand in China's steel market will not be reversed obviously before the traditional Spring Festival holiday (February 18-24), according to industry insiders.
In the first trading week of the year, the domestic steel market underperformed with the spot steel price composite index closing at 104, down 1.74 percent week on week.
Besides the inverted V-shape performance of steel futures and the weak billet prices, the major reason behind the sluggish steel market is the depressed demand, analysts note.
As the Spring Festival approaches, financial strain has forced many traders to give up buying more steels for reserves in winter. Under the circumstances, they chose the strategy of selling stocks.
Prices of the imported iron ore also fell slightly. On January 8, the price of 62 percent purity grade ore incorporated in the Platts iron ore price index closed at 71 US dollars/tonne, down 0.75 US dollars/tonne from the end of 2014.
China's cancellation of tax rebate for boron-steel starting from January 1, 2015 will also add pressure to the domestic market as some steels for exports will flow to home market. During the period, financial strain will have obvious impacts on the upstream and downstream sectors. In the short term, domestic steel prices still face downward pressure, analysts said. (Edited by Hu Pingchao, firstname.lastname@example.org)