Steel stocks down after report regarding oversupply due to exports from China

Yahoo! News: Shares of steel companies tumbled Thursday, after a published report detailed the threat of a global steel oversupply due to China’s new position as a net exporter.

Canadian steelmakers Stelco Inc. and Algoma Steel Inc. were among those that lost value on Thursday. Several firms have downgraded the sector in recent weeks on the belief that prices will decline next year and fall even further in 2006. China is central to steel supply and demand, given its rapid pace of industrialization and recent push to add more mills and facilities.

A story in The Wall Street Journal on Thursday said that over the past few years, China has threatened to create a steel shortage due to its high consumption trends. But now the country has become a net exporter due to a slowdown in its domestic demand and greater worldwide capacity. That could signal tougher times for the industry in the years ahead.

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