China Securities Journal cited Mr Zhang Xiaogang Deputy of the National People Congress of China and GM of Anshan Iron and Steel Group as saying that there are still uncertainties to challenge China steel industry in 2010 including domestic tightened credit policy, price gap between domestic and overseas market, export difficulty under international trade protectionism, newly released 50 million tonne capacity and cost hike which is to be settled in iron ore talk.

According to his analysis, 567.8 million tonnes of crude steel output in 2009 or a surge of 13.5%YoY in China, sharply compared with the tumble of as much as 30% in other regions of the globe is mainly owing to the impetus of domestic investments. But a mild adjustment which has been made in the credit policy by government recently is expected to damp down new investments in steel industry.

And Export is expected to be squeezed by the higher prices at home against overseas markets, coupled with the growing momentum of global trade protectionism. Besides, the newly acquired capacity of some 50 million tonnes will exert pressure on domestic prices and the hard talk is likely to push up the ore price. All of these uncertainties will be faced and tackled by China.