Asia Steel-China prices up 4 pct in 4th straight weekly gain
* Prices hold firm on slow end-user demand recovery
* S.Korean prices dip following POSCO's price cut
By Miyoung Kim
SEOUL, May 21 (Reuters) - Chinese spot steel prices rose nearly 4 percent this week, their fourth consecutive week of gains, supported by restocking by traders and a slow pick-up in demand from end-users.
Prices of China's benchmark hot-rolled coil rose 3.7 percent to 3,443 yuan ($504.5) a tonne, versus 3,320 quoted last week, data from Metal Bulletin showed.
For a graphic on Chinese spot steel prices, click:
"Market conditions continue to remain weak but there's definitely some recovery in demand, led by long steel products," said a Chinese steel trader.
There has been recent anecdotal evidence of a recovery in end-user demand, ranging from auto makers to builders, as the government's massive fiscal spending plan slowly starts to filter through the real economy.
"Pricing is stabilising and a recovery must be around the corner," Morgan Stanley analysts said on Wednesday.
"The property sector is rebounding and steel inventories are shifting downstream ... Orders have picked up in the past few weeks, especially in long products for the construction sector."
China has spent 230 billion yuan of the country's 4 trillion yuan stimulus package, and a significant portion of the spending was made on housing and infrastructure works, government data showed on Thursday. [ID:nPEK373568]
The stimulus also helped fixed-asset investment in urban areas jump 30.5 percent in April from a year ago, while industrial output rose 7.3 percent last month. [ID:nPEK372361] [ID:nPEK197368]
GLUT
But the nascent recovery in steel prices from a five-month low hit last month may reverse again, as increasing domestic production and imports continue to keep the market oversupplied.
"So far we are producing at a rate equivalent to an annual output of 520 million tonnes, (versus around 500 million tonnes produced in 2008) ... We will see a huge stockpile," Shan Shanghua, secretary general of the China Iron and Steel Association told Reuters on Wednesday. [ID:nSHA267189] Continued...
