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To: Julius Wong who wrote (70)	1/14/2005 4:15:30 PM
From: Sam Citron	Respond to of 3363

CHINA NEEDS 1.5 MILLION TONS OF SPECIAL ROD STEEL IN 2005 Asia Pulse; Jan 14, 2005 BEIJING, Jan 14 Asia Pulse - A preliminary forecast shows that in 2005, China's total demand for special rod steel will be 1.5 million tons; special wire steel, 5.5 million tons; special plate steel, 5 million tons; and seamless tubes, 400,000 tons. According to Secretary-General Hu Mingxiang of China Association of Special Steel Enterprises, the country's iron and steel industry will enter a stable development period in 2005, but the special steel sector will develop at a faster pace in the year. Hu holds the view that the performance of special steel enterprise in 2005 will be featured by high production costs, high prices and a limited space for profit due to the scant supply of raw materials such as waste steel, pig iron and ferroalloys. The demand for special rod steel in 2005 will include 5.2 million tons of steel alloy structure steel, 1.5 million tons of steel for gears, 1.6 million tons of steel for bearings, 1.3 million tons of stainless steel and 400,000 tons of alloy steel for springs. It is predicted that of quality special steel produced domestically, low-end products will be balanced in supply and demand or a little bit oversupplied, while high-end products will be in scant supply. The production of value added special steel products or those with hi-tech content and the export of special steel will also see a rapid growth in 2005. According to Hu, the automobile, diesel engine, engineering machinery, power generation and bridge sectors will have a strong demand for special steel in 2005 and the consumption of special steel by these sectors will be greatly increased. However, Hu noted that there is no obvious sign that the production capacity of special steel, especially high-end products, will be expanded in the country in the year. (XIC)