November 22, 2008

China would need 50 million tonnes steel for reconstruction

It is reported that reconstruction of the quake hit areas involving 15 million people to be settled down is becoming a focus nowadays with the rescue and relief work gradually winds up. It is estimated that the overall reconstruction will need about 50 million tonnes steel products in next 5 to 10 years.

Industry insider said that the reconstruction will also witness a process of urbanization. If per capita steel consumption is 0.33 tonnes per year the reconstruction work will require at least 5 million tonnes each year adding up to 50 million tonnes in ten years.

Mr Zhou Xizeng an analyst with CITIC Securities contended that considering the proximity factor, the steelmakers to directly benefit from this quake will include Chongqing Steel, Pangang Steel & Vanadium Co, Valin Pipe & Wire, Maanshan Steel and Anyang Steel etc.

He however warned that "But a strong market does not mean fat profits. Steel prices in the disaster affected areas are intervened."