A report published recently by the China International Finance Co. said that from January to June, the volume of domestic phenomenal consumption (output plus import and then minus export) rose by 22 percent from the same period last year, far exceeding the average on the world market.

Even if the domestic consumption of iron and steel products grows by eight percent in the latter half of the year, the domestic phenomenal consumption of iron and steel products in the whole of 2001 will surely surge by 14 percent, with the total volume exceeding 160 million tons, which will also far exceed the demand forecast made by relevant departments for iron and steel products on the domestic market in 2005.

Fifty-five major Chinese iron and steel makers achieved a 100. 14 percent in production to marketing ratio in the first five months of the year, a record high in recent years.

Real estate development and construction of infrastructure are considered as major factors to propel the fast growth in consumption of iron and steel products on the Chinese market, said the report.

The report predicted that prices for steel products on domestic market will go down in the forthcoming months and it is expected that by the second quarter of next year, the prices of steel products will bottom out.

The main reason lies in the fact that while the demand goes up, the supply of steel products on the domestic market also increases rapidly. For some time in the future, the growth rate of steel products supply will outstrip the demand growth rate, which may in turn bring down the prices of steel products in the end, explained the report.

(People's Daily 09/03/2001)