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China's stainless steel demand stays weak, makers say
8/27/2008 |
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Stainless steel demand in China, the world's largest producer, will stay weak next month amid concerns of an economic slowdown, the country's three largest producers said.
``The market hasn't improved,'' Chai Zhiyong, vice president of Shanxi Taigang Stainless Steel Co., the largest maker, said over the phone. ``It's still weak,'' he said. Building demand normally picks up in September when the weather cools.
China's economy expanded at the slowest pace since 2005 in the second quarter as the government tightened credit, and home prices rose at the lowest rate in 14 months in July. Korea's Posco and India's Jindal Stainless Ltd. this month cut prices.
``There is a lack of incentives to boost demand,'' said Jasmine Qi, a Beijing-based stainless-steel analyst at CRU International Ltd. ``China's tightening measures are likely to stay in place after the Olympics'' this month, she said.
Baoshan Iron & Steel Co. and other Chinese stainless steelmakers may raise production by as much as 15 percent in September from August, Macquarie Bank Ltd. said in an Aug. 20 note, without saying where it got the information.
Shanghai-based Baoshan, China's second-largest maker of the alloy, probably won't raise its output as ``demand for stainless steel hasn't recovered,'' Wang Chengxue, assistant to the president of the stainless steel unit, said in an interview.
Taigang won't lift output next month, Chai said late yesterday.
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