The End of China’s State-Owned Steel Boom?

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Cold-rolled steel

Adam Minter of Bloomberg News says China’s steel boom is over.

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The domestic economy is slowing, competition is increasing, and there’s widespread disgust and impatience with the smog pouring out of their stacks. In short, their lucrative business model for the past 3 decades is slowly dying.

On Monday, December 29, Chinese HRC jumped up 6.7%, landing at CNY 3,040 ($487.96) per metric ton and making it the day’s biggest increase. After hitting a 30-day low of CNY 2,950 ($473.52) per metric ton on Thursday, December 25, the price of Chinese slab rose 5.7% yesterday. For the fifth day in a row, the price of Chinese coking coal remained essentially flat at CNY 1,080 ($173.35) per metric ton. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($134.83) and a low price of CNY 840.00 ($134.83) per dry metric ton.

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The steel billet cash price held steady on the LME at $500.00 per metric ton. The 3-month price of steel billet saw essentially no change on the LME for the fifth day in a row, remaining around $480.00 per metric ton.

Monday saw the US HRC futures contract 3-month price drift down 0.2% to $605.00 per short ton after three quiet days. The spot price of the US HRC futures contract held steady around $605.00 per short ton.

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