The purchase price of steel prices in China fell by 16% - Meps

2012 for Chinese metallurgy was difficult in all respects. Reproduction of steel and metal production provoked a drop in prices for finished products in the domestic market of the country.

The tightening of credit policy in China entailed a slowdown in demand from the construction corporations of the Middle Kingdom. Infrastructure construction fell under hard control of the authorities.

The Chinese government took all measures to avoid the "overheating" of the economy, however, the country's steel industry is still growing and increasing the proposal of metal production.

The growth of the supply led to a gradual decrease in metal products intended primarily for the construction sector. The production of three types of metal rolling: reinforcement, rollers and galvanizing increased during 2012 by 41 million tons or +14% to the previous year.

It is not surprising that the prices for construction metal rolls collapsed in 2012, Meps say. The price index in 2011 was at 146.0 and fell to 122.7 last year, having lost more than 16%. Such price fluctuations brought China to the construction sector of nearly $ 32 billion.

Upon maintaining the current course of China’s state policy, MPS analysts do not expect improvements for the metallurgical sector in 2013. The level of the price index does not exceed the value of 122.8, a little higher than at the end of 2012.

The manufacturers of the reinforcement and drooping, according to MEPS analysts, have lost control of the situation and produce significantly more metal rolling than they can sell. Most likely, it is these companies that are guilty of falling the cost of steel and cast iron in the domestic market of China, emphasize MEPS experts.