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Steel prices in China to follow changes in stock market directly
8/9/2010 |
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Steel prices in China to follow changes in stock market directly
China Securities Journal cited a steel analyst with Shenyin Wanguo Securities as saying that, the steel price trend in China will directly follow the changes of the stock market during this period as the financial attribute of steel market has been exposed by the recent rebound.
The price movement of rebar futures 1101 contract just resembles the stock market and steel stock block recently, opening low, fluctuating upward and then moving down and finally closing at a higher level.
The paper cited some other industry and securities analysts said the spot steel price since July also followed the curve of the futures market and overall stock market. Steel demand will be stable in July and August, not to bolster the price to rise, but financial attribute will have a sway.
Shenyin Wanguo analysts said the sentiment turns better and moreover, the iron ore price has bottomed out, pulling up steel production cost. In this case, the rebounding stock market succeeded in boosting the steel price.
They said the relevance between the steel price and financial market is close for the moment, but this could not last. Once steel price gain grows too big and its financial attribute will die away.
Some institutes think the periodic bottom is set for the steel market, but the uptrend may not be smooth as demand is unlikely to boom amid haunted high production rate and the financial and economic uncertainties will remain.
(Sourced from China Securities Journal)
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