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Chinese MOFCOM comments on steel price surge


05-06-2016 00:42 BJT

China's Ministry of Commerce spokesman said at a news conference Thursday that international and domestic factors are behind the recent rebound in global steel prices. 

Steel prices have increased 20 percent since the beginning of the year, rising from about three-hundred US dollars per ton in January, to about 370 dollars in April. Steel prices in China have also surged. Commerce Ministry spokesman Shen Danyang says a preliminary analysis shows that global and domestic influences are responsible for the surge.

An economic revival has stimulated demand for steel internationally while increased prices for iron ore have also boosted steel's cost. Domestically, China’s policy of reducing overcapacity and pushing consumption has affected prices. Shen says China's ongoing launch of infrastructure projects has supported the demand for steel.

China's steel sector had suffered years of plunging prices and factory closures due to economic slowdown and overcapacity. The sector experienced their worst year in 2015, with combined losses in main business soaring 24-fold from 2014 to over 100 billion yuan, or 15 billion US dollars.

Demand for steel in China has picked up this year because of  infrastructure needs, property projects and government measures to boost the sector. At the press conference, Shen urged other countries to help guide the steel sector through its tough times.

Despite warming markets and climbing prices, however, some are warning that it's too early to celebrate because it’s still unclear how long higher steel prices will last. 

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