Chinese steel market hoping to boost prices with round of destocking

Jun 30, 2010 | 01:00 PM |

The Chinese steel market has kicked off a round of destocking that will probably last two months as domestic prices show no sign of rallying, market participants said.

"A lot of traders and stockists are selling inventories as they are expecting further price decreases in coming weeks," a local trader said.

Chinese steel stocks have grown quickly this year, encouraged by 11.9-percent first-quarter economic growth and higher-than-expected iron ore price increases.

Crude steel output hit record highs in four of the first five months of this year. "It was known to all that such a huge steel output was not sustainable," another Shanghai trader said. "As a result, inventories surged. The current destocking process will return inventories to normal levels so that the market can get healthy again."....

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