I recently visited several steel mills. Above all esle, I found the mills were desperately in need of new orders.

Demand from both the domestic and overseas markets began to shrink markedly from August this year, and with the current financial crisis there is no evidence to suggest that this trend will be reversed anytime soon.

Stockers have been reducing new orders to steel mills, while at the same time cutting prices by large percentages of up to 30%, until now. Some small steel mills have been forced to close, and big mills have reduced production. The related products include plates, coils, wires, welded tubes and other lower value-added products.

Prices for hollow bars, however, have dropped by 17% so far, on average less than the 12-30% drop of other steel products. Hollow bars are a kind of seamless tube, widely used in machinery industries and in the petrochemical industry, as well as for boilers and power generation services. In the hollow bars market there are fewer competitors, and it is a comparatively higher value-added product. The overwhleming majority of hollow bars are sold directly from the mills to the end-users in China and to overseas buyers.