October 2010 | Steel Tracker
Chinese Central Bank move hits prices already in decline: Flat Product Analysis-China, Japan, Other Asia
High stocks and slack demand together have been depressing prices in China for weeks.
High stocks and slack demand together have been depressing prices in China for weeks; dealers in Chinas major cities were reckoned to be holding 5.23m tonnes of HR coil alone at the end of September, a 4% increase over the August figure. After the market failed to show its usual seasonal strength following the autumn holiday it was in a fragile state when the central bank announced a surprise increase of 25 basis points in its lending rate. This put its deposit rate at 2.5% and its lending rate at 5.56%.
This is the first rise in interest rates for almost two years; government anxiety over the overheated property market and general inflation was well known. In late September an official of the National Development and Reform Commission (NDRC) said that anti-inflation action would be needed as he was expecting the consumer price index for...
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