Chinese steel, Temporary Overproduction of 300million tonnes, prices will return to normal

Discussion in 'General Trading Discussion' started by Maple Archgate, Apr 23, 2016.

  1. Maple Archgate

    Maple Archgate Member

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    I contract out to a leading economist in the business world. The reason for the record low of £30 per tonne is the reason that the Redcar Steel plant in England closed down and the Port Talbot plant is threatened with closing. China has massively overproduced steel therefore the supply market has been flooded. When the surplus steel begins to be used the prices will return to the £120-£130 per tonne that it was before.
     
  2. kgord

    kgord Senior Investor

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    Well the Chinese are up to no good as usual it appears. What a surprise, they have over produced and screwed up the market once again. The Chinese need someone to sit on them and lay the law down. I don't think the person to do that is Mr. Trump however, someone needs to take them to task for the ways they constantly mess up the world market in one way or another.
     
  3. Corzhens

    Corzhens Senior Investor

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    As per the law of supply and demand, it is understandable that any item in excess will cause to downgrade the market value. China's production is diminishing due to lack of workers so those factories still operating are working double time for their production to have an excess as a buffer when they temporarily close down. Just like oil which Saudi Arabia is pumping in excess because they fear that time will come that demand for oil will go down to zero. That is one thing good with a hoarder, he can keep the excess inside the warehouse so the market will not be flooded and the price will remain stable.
     

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