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Chinese metallurgists are consolidating to survive
24 October 2007The volume of steel made in China practically has been doubled for last four years and has made nearby 530 million tons. On the one hand, it has led to increase in profit of the majority of the steelmaking companies. However, with another - promoted a sharp rise in prices on iron ore, that very negatively affects fine Chinese manufacturers, who should struggle for survival. But experts mark, that, probably, it and to the best: growing market prices managed to make that was not possible to officials - to accelerate process of consolidation in quickly developing Chinese steelmaking sector. The fine companies while only need to observe, how the Chinese metallurgical giants absorb weaker players. Experts mark, that small manufacturers should leave this market if the prices for iron ore will continue to show such growing tendency. it is not necessary to forget, that the prices for steel can fall in the near future on a background of reductions of investments into long-term assets. Now the iron ore, containing about 64 % of metal, costs nearby 50 doll./ton. For last 10 years the price for it has already grown on 180 %, and analysts expect the further increase approximately on 25 % in following year which should start in April 2008.
Now In the Chinese steelmaking market (by the way, the world’s largest market) there is huge quantity of the fine competing companies. Only some giants are dominating over the Europe, Northern America, Japan and South Korea. About 70-75 % of world deliveries of iron ore is being controlled by three largest international companies. The end user of this ore is the automobile sector, about 60 % of which is controlled by 6 motorcar giants. And the steelmaking companies are just between them. And, China supervises only about 30 % of the market.
- Asian metallurgists are searching for new investing projects
- China stocks are overheating
- American banks are getting rid of credits
- China has made the complaint in WTO about the USA
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