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Is falling steel price pointing to an end of the sector’s bull run?

China's steel prices are falling recently after climbing for more than two years amid the government's efforts to cut capacity in steel and other industrial sectors. Some believe it's a sign that the bull run for the sector is coming to an end with more downward pressure ahead.

The price of steel billets in Tangshan, the country's biggest steel production base, had dropped to about 3600 yuan per tonne on 12th November from about 4000 yuan only two weeks ago. The price of hot rolled coil had dropped to 3800 yuan per tonne from about 4320 yuan per tonne on 21 August.

The fact that steel prices had remained strong in the past two years and managed to stay so even in winter, usually an off season for steel demand makes the recent price drops more notable.

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