Cooling property market to depress steel prices

• Published 20 May 2010

Real estate transaction volumes have been slowing over the last month and we expect steel and iron ore prices to soften further in coming weeks, though we do not envisage a precipitous slump.

The shockwaves from last month's real estate tightening are beginning to hit the iron ore and steel industry, putting a damper on the short-term outlook for commodity prices. Rising iron ore and steel prices have temporarily stalled after rising about 50% for iron ore and about 10% for rebar since the beginning of the year. Does this signal a turning point for the industry and foreshadow a slump in the second half of the year?

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