WALL STREET JOURNAL
Signs of a turnaround in the property market and increased infrastructure investment in China could offer a glimmer of hope that the steel market is headed for a recovery, even as market participants suggest the floundering sector may struggle to rebound until 2013 at the earliest.
Steel prices continue to fall after a lengthy period of weakness during which the price has plunged below the cost of production for many steel producers.
Salzgitter, Germany's second-largest steelmaker, said earlier this month that the financial crisis had hurt demand from traditional buyers in construction and manufacturing, and that customers have been reluctant to place orders amid the uncertainty of the European sovereign-debt crisis.
"The steel market is in dire straits," said Denny Sabah, a research analyst at trading company Ronly Holdings. "The summer slowdown in Europe usually leads to a bounce-back in September, but this didn't happen last year and it doesn't look like it's going to happen this year. There is far too much overcapacity in Europe, and profit margins are wafer thin, if producers are making any profit at all."
THE ECONOMIC TIMES
A number of Chinese fund managers are gearing up to launch gold exchange-traded funds (ETFs) to meet a growing domestic demand for alternative investment channels.
Guotai Asset Management, Bosera Asset Management and E Fund Management have got permission to develop gold ETFs with the Shanghai Stock Exchange and the Shenzhen Stock Exchange, company sources said.
China, the world's largest gold producer, is on its way to overtake India as the top gold consumer this year. China's gold investment demand more than doubled between 2009 and 2011, according to the World Gold Council.
Fund houses said they are confident their products will appeal to investors looking for alternative choices as other investment channels, especially stock and property markets, have been lackluster.
"We believe the retracement in gold prices [from record levels] is good for investors in the medium to long term," an official at Guotai Asset Management said, who declined to be named.