China's steel price will grow more slowly in the second half of the year and then stabilize, according to the latest report from the National Development and Reform Commission.

 

By the end of June, the average price of major steel products had risen 13.51 percent since January to 4,217 yuan (US$534) per ton, said He Xiaoying, a researcher with the Price Monitoring Center of the commission in her report.

 

But He predicted that steel price growth will taper off because of overcapacity in the industry.

 

Domestic steel production reached 180.6 million tons in the Jan.-May period this year, up 24.6 percent year on year, He said.

 

The government's macro control policy, which includes raising interest rates to rein in overheated fixed asset investment, will also help restrain the demand for steel, the report said.

 

The price of imported iron ore jumped 19 percent in the first half, impacting production costs, so it is unlikely that the steel price will slump in the second semester, He said.

 

He concluded that the domestic steel price will remain stable in the second semester, at a level probably slightly higher than for the first half of the year.

 

(Xinhua News Agency July 27, 2006)