After slowing down for several months, China’s steel output in December shot up by 24 percent over November.
Auto companies expect steel prices to soften but steel companies expect them to firm up. Surely, one of them has to be wrong. But that confusion about the outlook may be explained by looking at the shift in factors known to influence steel prices. China is the most important factor, being the world’s largest producer and consumer of steel. The December quarter saw its economy return a soft 4 percent growth, prompting the government and central bank to support growth.
- Money Control