It is reported that Chinese steelmakers are confident that they can meet the expected increase in demand for their products in the post-quake reconstruction work.

Mr Yang Baofeng a steel industry analyst at Orient Securities in Shanghai said although the demand for steel products is estimated to be huge, it will be spread over two to three years. We do not expect a sudden spurt in demand causing severe shortage. The reconstruction work will take time."

Mr Dai Guoqing deputy director of Beijing based Shougang Co's research institute of development said "The higher steel demand after the quake is only one of the many factors influencing the demand supply equilibrium, and is by itself not drastic enough to drive steel prices up significantly."

Mr Wang Jianhua deputy director of the research center of Mysteel said "That would ease the demand pressure, allowing a diversion of supply for the reconstruction."

Other industry analysts said any sharp spurt in steel product prices is unlikely although the projected rise in demand may put some pressure on prices. Analysts also predicted some public works projects planned earlier for the quake zone will be cancelled or shelved.

The damage to plants and machinery of steelmakers at the epicenter is believed to be limited and would not have much effect on overall supply and demand.