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          Steel prices soar in Shanxi after national holiday

          By Dong Jirong and Shi Lin ( chinadaily.com.cn )

          Updated: 2012-10-12

          Steel prices soar in Shanxi after national holiday
           
          Steel prices in Shanxi continue to soar after the first increase of 20 yuan to 60 yuan ($3.20 to $9.50) per ton on Oct 8.

          Steel prices in Shanxi continue to soar after the first increase of 20 yuan to 60 yuan ($3.20 to $9.50) per ton on Oct 8, the first day after Golden Week. The price of high-speed wire steel increased by 20 to 60 yuan per ton on average.

          The price of steel billet jumped by 70 yuan ($11.16) per ton on Oct 8, providing a strong stimulus for the steel market.

          “The rise of steel billet prices and the temporary downtime at construction sites during the national holiday created a large demand for steel. This can be regarded as the major driver for the price increase,” said Xin Bo, steel analyst from SCI.

          The performance monitoring index in the manufacturing sector had a seasonal rebound in September, reaching 49.8 percent, 0.6 points higher than August. But Xin Bo warns that whether the rising trend will continue depends largely on trading volume.

          Steel traders should be prudent to purchase new steel because steel prices may decrease again due to excessive supply. This poses a potential risk for the steel market, Shanxi Youth Daily reported.

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