Qi Xiangdong: steel prices to remain in stable upward trend

SteelOrbis Shanghai Mr. Qi Xiangdong, Deputy Secretary General of China's Iron and Steel Association (CISA), stated on the fourth Far East Steel Meeting that China's overall steel prices are expected to be in a stable upward trend in 2006. According to Mr. Qi, China imported 25.82 million metric tons and exported 20.52 million metric tons finished steel products in 2005, while imported 1.31 million metric tons and exported 7.07 million metric tons semi-finished steel. Calculated on crude steel basis, China was a net exporter with 123,000 metric tons crude steel in 2005. Based on the import and export volume in January-February 2006, both the imports and exports will be around 20 million metric tons in the entire 2006. Mr. Qi Xiangdong estimated that the growth rate of fixed assets investment will be above 20 percent due to the rapid economic growth. Meeting the domestic demand for iron and steel products will be China's first priority. The steel consumption in the industries of construction, machinery, light industry, automobile, coal, shipbuilding and petrochemical is projected to be 369.2 million metric tons, up 42.38 million metric tons or 12.97 percent from the previous year. Railway construction will also further drive up the steel consumption. According to Mr. Qi's prediction, China's 2006 crude steel output may increase 11.3 percent year on year to 392 million metric tons, and finished steel output may be 440 million metric tons, up 10.9 percent. The steel consumption may increase 12 percent year on year to 450.61 million metric tons. The decrease in product supplement and strong demand will keep steel prices in a stable increase.