Chinese steel prices sink after surprise interest rate hike

Oct 20, 2010 | 12:35 PM | Henry Chen

Chinese steel prices sagged Wednesday as markets were rattled by the government raising interest rates for the first time in nearly two years.

"The surprise rate hike (of 25 basis points) resulted in a big drop in forward prices on the Shanghai Steel Exchange, which has pushed down spot market prices," a major trader in Shanghai said.

But hot-rolled coil (HRC) prices were already looking less robust, market participants said.

"High inventory and weak domestic sales are weighing on domestic HRC prices," another market participant said.....

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