Chen Ying, deputy general manager of leading Chinese steelmaker Baosteel, has stated that steel supply and demand in China is expected to be stable in the fourth quarter this year, while also remarking that there is a lack of support for increases in steel product prices during the quarter. Mr. Chen also said that, although quarterly iron ore contract prices have dropped a little, they are still at high levels.
Meanwhile, Baosteel general manager Ma Guoqiang stated that in the fourth quarter Baosteel faces difficulties caused by overhaul works and high costs.
Mr. Ma said that, compared with 2009, demand in the Chinese domestic steel market has increased obviously in 2010. Due to the increases in sales volumes and prices, and also due to the optimization of Baosteel's product mix and cost management, the net profit of the company in 2010 is expected to see an increase of 110-130 percent on year-on-year basis. As regards 2011, the Baosteel general manager said many uncertainties still existed, adding that he expected neither a strong hike nor a deterioration in steel demand during the year.
Mr. Ma went on to say that in 2011 competition in the steel industry in China will be more severe, while iron ore prices will remain high, but in the long term iron ore supply will surpass demand and this will be to the advantage of the steel mills.