Sentiment might remain low towards Chinese steelmakers amid fears of an economic slowdown

Sentiment might remain low towards Chinese steelmakers amid fears of an economic slowdown as the government continues to withdraw liquidity. In particular, Chinese steelmakers have been under increasing pressure from accelerating iron ore cost inflation since mid-2009 compared with their anemic product pricing power, with the potential for more pain if the ongoing iron ore pricing negotiations make new contracts more expensive than anticipated.