China infrastructure spending expected to help steel recovery in 2013

Mar 05, 2013 | 11:38 AM |

Tags  steel, iron ore, Chen Kexin, China Ministry of Commerce, infrastructure, Rio Tinto Plc, Fortescue Metals Group Ltd, Vale SA

SHANGHAI — China’s steel sector will recover solidly this year, helped by stronger government infrastructure spending, despite recent setbacks, one analyst said.

The recovery will come on the back of firm downstream demand, rising output costs and looser monetary policy as long as there is no significant downturn in the American and European economies, according to Chen Kexin, chief analyst at the Distribution Productivity Promotion Centre of China Commerce, a research institute linked to the country’s Ministry of Commerce.

"The U.S. Federal Reserve will not end its quantitative easing program unless the risk of an American recession is removed and U.S. job data improves. This will continue to give support to commodity prices, including those of iron ore and steel products," Chen said, noting that spot prices for 62-percent iron ore fines are expected to average more than $130 per tonne c.f.r. China this year.....