The sharp slowdown of the growth in the domestic construction and real estate industries and the rising raw materials costs in the first half have driven steelmakers to cut their output, carry out maintenance in advance or even halt production. According to a source, it was the 7th consecutive week (from August 22 to 29) for the domestic steel prices to trend downward with construction steel, medium plate and cold rolled sheet/coil prices all going down.

    According to the latest news, imported iron ore with 63.5 percent grade was priced at 1,260-1,300 yuan per ton on September 1, down 200 yuan per ton from a month earlier. As of August 8, iron ore stock at Chinese ports still stood at 67.55 million tons, up 52.86 percent from last year's 44.19 million tons.

    Besides, the Shanxi Coking Enterprises Federation recently decided to lower coke price by five percent, or 150-200 yuan per ton, in September because of a weak demand. Coke producers in the province also will cut their output to ease pressure from the high stock level among steelmakers. A source predicted that the growth of iron ore supply will exceed that of consumption in 2008. It is almost unlikely to see a revival in the steel prices at the rest of the year amid a downward trend in both iron ore and coke prices. The situation will be worse when steel products originally bound for the overseas markets have to be resold in the domestic market due to the upward adjustment on export duties by the State.