Warnings pile up for China's steel market after 47% surge
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Beijing
WARNINGS are stacking up fast after China's rally in steel prices. Fitch Ratings Inc said that prices lifted in part by heightened speculation are destined to slump, while a bank in Singapore flagged the risk of a boom-bust cycle reminiscent of China's equity market.
The rapid advance this year isn't sustainable as mills are expected to bring idled capacity back online, raising steel production, Fitch said in a report on Monday. Price gains have been driven by a seasonal recovery in activity that's been exacerbated by increased speculation in the futures market, according to analyst Laura Zhai.
