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Rolled steel price in China is expected to fall this year, according to a report by the price monitoring center of the National Development and Reform Commission published in the China Securities Journal on Wednesday.

 

Figures show the average rolled steel price level in 2005 was 1.47 percent higher than that of 2004.

 

At the end of 2005, however, the steel price dropped due to over-production, down 13.1 percent from the previous year.

 

By the end of 2005, China's potential capacity in iron and steel production had reached 470 million tons, 120 million tons more than the demand amount, said He Xiaoying, an expert with the price monitoring center.

 

In 2006 the over-supply problem will be exacerbated because the country's steel output is expected to grow at a rate of 10 percent to 15 percent, probably hitting a new record high of 400 million tons, he said.

 

But the price will not drop too much this year since production costs remain high and the country's economic macro-control policy will continue, he said.

 

(Xinhua News Agency February 9, 2006)