Affluent stocks ruin further rise in steel prices

The recent round of recovery in steel prices that began from late July was built on a feeble foundation, thus unable to sustain for long, said a source with Guangdong Iron and Steel Association. In other words, demand is far from adequate to bolster the continued increase of the steel prices. He attributed the rise to manipulative behaviors in the futures market and the three big mining groups' aggressiveness to raise iron ore prices.

Market players are still reluctant to return to the market because, even though some steelmakers have taken steps to limit their utilization rates, the effectiveness of these efforts seems fruitless.

However, the source is optimistic about the long-term prospects of the market on several contributing factors such as the process of China's urbanization and industrialization as well as the great development of western region.