China steel prices still face headwinds -industry body

SHANGHAI Tue Nov 13, 2012 9:31pm EST

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SHANGHAI Nov 14 (Reuters) - A recent rally in steel prices in China, the world's top steel market, is facing headwinds despite falling inventories, as overcapacity will continue to bite into margins, the China Iron & Steel Association (CISA) said on Wednesday.

Total inventories of five main steel products including hot-rolled coil and rebar in 26 major markets fell 2.8 percent from the end of October to 12.08 million tonnes on Nov.9, CISA said in a statement on its website.

The financing costs for the country's large steelmakers jumped 29 percent to 61.2 billion yuan for January-September from a year earlier. (Reporting by Ruby Lian and Fayen Wong)