These are great times for China’s gargantuan steel industry as product prices soar to multi-year highs, mills’ profits swell and speculators stake out record positions in futures markets in the country that makes half of global supply. They could be over soon.
While demand in Asia’s top economy has remained strong, “as the property market cools and investment growth slows, steel prices will start to fall,” Xu Ke, an analyst at Huatai Futures, said by phone from Shanghai. “We’ve seen many times in the past that when prices fall, they can fall very quickly.”
Prices sagged on Friday. Reinforcement-bar futures retreated as much as 3.5 per cent to 3,528 yuan a metric ton on the Shanghai Futures Exchange. The drop takes the most-active contract down from the highest close since 2013 on Thursday, when open interest was at a record, and pares a fifth weekly advance that’s the best run this year.
China’s old-economy steel industry is booming even as the central government seeks to rein in its more unruly elements and combat overcapacity. State-ordered closures of induction-furnaces have spawned a shortage of reinforcement bar, a basic product used in construction. That’s hoisted prices and attracted speculative interest. Still, with slower growth seen this half, and other mills expected to boost output, the rally may be set to falter.
“There are fundamental factors underpinning the price surge,” said Xu, citing the tighter supply after the government efforts to cut steel capacity. He added: “I’m generally more bearish about the second half than most.”
For now, mills are showcasing impressive second-quarter figures after profitability surged. Angang Steel Co., the listed unit of China’s fourth-biggest steelmaker by output, said on Thursday it expects first-half net profit of 1.82 billion yuan compared with 300 million yuan a year ago. On Monday, Hesteel Co., the listed unit of China’s No. 2 producer, said first-half profit could triple.
In June, Fortescue Metals Group Ltd., the Australian iron miner, highlighted the shortage of rebar and higher prices. At the same time, Chief Executive Officer Nev Power forecast rebar makers’ margins aren’t long-term, “and as new production comes in, we’ll see those margins come back to normal.”
Directed: Smeep Kang
Produced: Soham Rockstar Entertainment; SKE Production
Cast: Rishi Kapoor, Jimmy Sheirgill, Sunny Singh, Omkar Kapoor, Rajesh Sharma
Rating: Two out of five stars
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The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
THE BIO
Family: I have three siblings, one older brother (age 25) and two younger sisters, 20 and 13
Favourite book: Asking for my favourite book has to be one of the hardest questions. However a current favourite would be Sidewalk by Mitchell Duneier
Favourite place to travel to: Any walkable city. I also love nature and wildlife
What do you love eating or cooking: I’m constantly in the kitchen. Ever since I changed the way I eat I enjoy choosing and creating what goes into my body. However, nothing can top home cooked food from my parents.
Favorite place to go in the UAE: A quiet beach.
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
MATCH INFO
Newcastle United 2 (Willems 25', Shelvey 88')
Manchester City 2 (Sterling 22', De Bruyne 82')
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
THE SPECS
Engine: 1.5-litre turbocharged four-cylinder
Transmission: Constant Variable (CVT)
Power: 141bhp
Torque: 250Nm
Price: Dh64,500
On sale: Now
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Company%20Profile
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
What are the influencer academy modules?
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Mohammed bin Zayed Majlis
Trippier bio
Date of birth September 19, 1990
Place of birth Bury, United Kingdom
Age 26
Height 1.74 metres
Nationality England
Position Right-back
Foot Right
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Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
