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      Chinese steel price likely to fall: observer

      2012-12-06 07:59 Xinhua     Web Editor: qindexing comment

      China's steel price will probably fall slightly in December over waning demand, predicted Lgmi.com, a steel industry observing website on Wednesday.

      Lgmi.com released its November "Steel PMI", the Purchasing Managers' Index for the steel sector. The reading was 45.2 percent, down 5.1 percentage points month on month.

      A Steel PMI reading above 50 percent indicates expansion from the previous month, while readings below indicates contraction.

      The weak Steel PMI in November means that steel prices are likely to fall in December.

      The website said steel demand in December is usually weak, and steelmakers may face a strained money chain towards the end of the year. So they may choose to destock in order to cash in.

      Contracted demand and increased supply will probably drag down steel prices, said Lgmi.com

      The website surveyed some 1,000 purchasing managers from enterprises buying or selling steel products from 57 cities to calculate the Steel PMI.

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