Chinese Steel Mills Pessimistic About 3Q Jul 14, 2010

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A recent survey of Chinese steel producers conducted by Steel Business Briefing Research and Consulting found that most mills are pessimistic about steel pricing and production in the coming quarter.

SBB’s Analytics China reports a significant majority of surveyed mills expect Chinese steel demand to be lower in the third quarter compared with the second quarter. Almost half of the expected prices are predicted to decline.

The mills cited uncertainty over government policies and seasonal factors as contributing to the outlook. Government stimulus projects, SBB noted, are providing some stability in demand and this is expected to last for another year or longer.

None of the surveyed mills expect increased 3Q exports and a large number of respondents believe production at their mills will decrease in the July-September quarter. Half are planning production cuts as a result of maintenance or poor demand.

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