Chinese addition of 50 million tonne capacity to depress market further
Reuters
reported that the Chinese steel market, which has been subdued since
late last year, reflecting tight credit conditions and continuing
property curbs, is likely to come under further pressure as more
capacities come on stream in 2012.
Bank of America Merrill Lynch said in a note “We forecast China steel
demand growth to slow down to 6% in 2012 and 5.8% in 2013 from 12.8%
CAGR during 2008-11, mainly due to property tightening and slowing
infrastructure investment growth which accounts for about 50 percent of
China's steel demand.”
Citing estimates from the China Iron and Steel Association, it added that the continued expansion in
China's crude steel capacity could also hurt prices, with another 50
million tonnes in new crude steel capacity expected this year.
BoA-Merrill Lynch said that “As a result, we expect China's steel market
to experience another difficult year in 2012 and the forecast price
will likely fall by an average of 4%.
