On December 17, the China Iron and Steel Association (CISA) predicted in its monthly report that, in line with the upcoming Chinese New Year holiday and the traditional low season in winter, the domestic steel market may fluctuate within a narrow range in the near future.
The CISA indicated that in order to control domestic price levels and prevent hyperinflation, the Chinese central government has taken various measures to withdrawal capital from circulation, which will definitely affect market liquidity and the demand for steel. As a result, the CISA said, domestic steel enterprises have to keep a close eye on changes in market demand and be more efficient in the use of funds.
The CISA also said it expects that the growth of domestic demand for long steel products may accelerate, which will drive the increase of long steel prices. On the other hand, the CISA said demand for plated sheet will be relatively weaker and so support for price increases will be weaker than for longs.