The Nanjing Commodity Exchange has announced plans to launch a scrap steel price index by March 2010. Shu Yang, chairman of the exchange, announced the decision to launch the program as a step to smooth out volatile price markets.
Yan Qiping, general secretary of the China Iron and Steel Application, points out that China’s crude steel output was around 560 million tons last year, which accounted for about 40 percent of the global steel output.
Meanwhile, Chinese scrap steel consumption stood at about 80 million tons last year with an average price of around 2,500 yuan ($US366) per ton. The Chinese government expects the total volume of scrap steel consumed to grow significantly this year. By using an index, China expects to see a reduction in price fluctuations.
Qiping notes that there presently is no influential index for scrap steel in the global market.
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