Chinese steel prices are at a nine-week high and according to China Security News, a steel industry association official has suggested that there is room for further price rises.
However, the surge in demand has caused congestion at Chinese ports off-loading iron-ore that is contributing to rising ocean freight rates. The Baltic Dry Index, a gauge of commodity shipping costs, advanced for a 14th straight day. The steel industry accounts for almost half of all dry-bulk cargo.
With a 7.5 percent tumble in hot-rolled steel prices traded in Shanghai last week, it is clear demand is mainly driven by rod products for the construction boom being initiated by China's economic stimulus plan.
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