Steelmakers are confident they can meet the expected increase in demand for their products in the post-quake reconstruction work.

Although the demand for steel products is estimated to be huge, it will be spread over two to three years. “We don’t expect a sudden spurt in demand causing severe shortage,” said Yang Baofeng, a steel industry analyst at Orient Securities in Shanghai. “The reconstruction work will take time.”

For that reason, industry analysts said, any sharp spurt in steel product prices is unlikely although the projected rise in demand may put some pressure on prices.

Dai Guoqing, deputy director of Beijing-based Shougang Co’s research institute of development, said: “The higher steel demand after the quake is only one of the many factors influencing the demand-supply equilibrium, and is by itself not drastic enough to drive steel prices up significantly.”

Analysts also predicted some public works projects planned earlier for the quake zone will be cancelled or shelved.

“That would ease the demand pressure, allowing a diversion of supply for the reconstruction,” said Wang Jianhua, deputy director of the research center of Mysteel, a leading provider of industry information. Continue reading ‘Steel production can meet reconstruction demand’ »

I found this article based on a report by the Belgian bank Fortis in their Asian Metals Monthly Review – interesting not so much for its predictions on copper, but rather their analysis of China and the wider impact that may have on metals prices in general.

For anyone interested in copper predictions, the report makes interesting reading, specifically since it analyzes the current trend for China to import copper concentrates and scrap rather than refined copper. While this will support copper prices generally, the move will take the direct stimulus from the copper wire-bar market and allow stocks of refined metal to rise, something that is already happening, which in turn will weigh down on prices. The report calls out the negative arbitrage between the LME and the Shanghai futures market where the former is some $800/mt higher than the latter, a reflection of the abundant metal supply in the domestic market and the affect of import/export duty changes imposed over the last 12 months.

US copper imports are down 29% in the first two months of this year, compared to the same period last year. While the reduction in direct US imports is not as great in absolute terms as that for China (the US is number two to China in consumption terms), it has been accompanied by a less well documented trend of the US becoming a surrogate copper consumer over the last 5-6 years as the electrical goods that were once made in the US have been made in China. The US still consumes as much copper, but now more is in the form of imported products than raw material. This could also be true for steel, aluminum, and many other metals. As the US consumer buys less this year and next, the knock on affect will be a subtle reduction in demand of many metals by manufacturers overseas.
 
Fortis suggest the Chinese economy will slow significantly after the Beijing Olympics due to a combination of government inspired credit tightening and increases in reserve requirements. This will bring about a deliberate reduction in the pace of China’s growth in the remaining years of this decade as the government’s priority becomes inflation and sustainable development. The affect on the wider metals markets will likely be similar to copper which could mean more stable and reasonable prices from the latter part of this year onwards.

SHANGHAI, China, May 16 /Xinhua-PRNewswire-FirstCall/ — China Precision Steel (Nasdaq: CPSL - News), a niche precision steel processing company principally engaged in producing and selling high precision cold-rolled steel products, announced today its results for the third quarter of fiscal 2008 ended March 31, 2008.

2008 Third Fiscal Quarter Highlights

– Revenue grew 61.3% year-over-year to $18.7 million. Continue reading ‘China Precision Steel Announces Third Quarter Fiscal 2008 Results’ »

Steel producer Corus, part of industrial giant Tata, said it is raising base prices for quarterly strip steel contracts in continental Europe.

Corus Strip Products will increase prices by a minimum of 130 euros per tonne from July 1, Corus said in a statement.

The group blamed tight market conditions and ‘extreme cost increases for raw materials’.

‘At the same time, Corus Strip will enter into discussions with its customers to discuss the consequences of the extreme cost increases in relation to current annual contracts,’ the statement said.

I understand in the UK, that the price increases are between £130 for hot rolled up to in excess of £200 for Galvanized.