China's steel prices forecasted to remain high in 2008

China's steel price is predicted to remain high in 2008, and it would break US$1,000 per ton in the near future, according to sources.

The rising price is mainly resulted from the growing domestic demand and rising costs of raw materials, including those for iron ore and coal coke, according to analysts.

The government has been striving to eliminate the outdated capacity, but the deployment of the newly-developed production capacity has not been on the place. Moreover, the reconstruction after the severe winter whether and rising investment in the real estate all pushed up the steel demand.

Since the benchmark price for iron ore was settled, at least 57 domestic steel mills have increased their prices. Baosteel<600019>, China's leading steel manufacturer, said in February that it would increase the steel prices by as much as 20% for the second quarter of 2008.

China's steel prices increased by 23% in March, compared with the same period of the previous year, according to China Iron and Steel Association.