Late in12th May, People’s bank of China claimed to raise 0.5 percentages for reserves against deposit rate. For this adjustment, the reserve rate of large financial institution breaks the record to 21%.

Reason

1. Hedging surplus fluctuation
2. Relieve the appreciation pressure of RMB
3. Control the inflation demands.

Consequences

Continuous raising reserve against deposit rate drive many commercial banks limiting the loan amount, which leads higher financing cost and operation pressure.

For steel market, the accumulative effect from limiting loan gradually appears, with the slowing industries as automobile, machinery and household appliance etc, the demands for construction materials also falls. After 9 weeks constantly falling, the price raising for steel is considered to be hard in the near future.

Related product: Stainless steel sheet