hedging at under 24000 per tonne, page-19

A little extra info for those interested, courtesy of Kitco......


China’s steel sector faces problem of plenty
Commodity Online
NEW DELHI: Following a huge rise in production, China’s stainless steel industry is facing a problem of plenty now.

The glut has caused panic in China’s stainless steel market. A sharp fall in nickel and stainless steel prices, has forced a joint cut in production from this month in China.

State-owned and private mills are reportedly working in tandem to support falling prices. Some plants have resorted to production cuts, while others have commenced their maintenance work early.

From the peak of end-May, stainless steel prices had been falling and by mid-July, the market was 25 per cent lower. From around $4,500 a tonne in May, the rates have declined to less than $3,300 a tonne. Steel traders apprehend there could be a further drop in August when seasonal demand stays weak.

The sharp fall in prices and oversupply of stainless steel together with the rapid expansion of production capacity since the second half of 2006 has led to a substantial build-up in stainless steel inventories in China.

On the back of a rapid growth in stainless steel capacity, a strong rise in stainless steel production in the second half of 2006 was about 5.3 million tonnes, 68 per cent higher than in 2005.

For 2007, the forecast output is about 7.3 million tonne, up 38 per cent year-on-year.