Steel+output+likely+to+increase


 * Title of Article:** Steel output likely to increase
 * Source:** []
 * Date:** January 12, 2011


 * Explanation: ** In this article, it states that China's crude steel production for 2010 is at a new high (628 million tons). In 2010, there has been a 10.7% increase from 2009. This is good for economists because now there is a huge increase in supply of steel production. However, one thing to worry about this is that steel production might meet overcapacity. This can cause a big surplus of steel in China. The government, luckily, is trying to prevent overcapacity. China's crude steel output rebounded in December after falling in September. Economists expect steel output and iron ore imports to increase this year. The increase in steel production is good for steelmakers in China’s market because steel prices are increasing due to increasing commodity prices and stocks of steel products. Steel prices can still go up because of an increase in demand in China for key metal indexes.

· Demand – The desire of consumers for a certain good or service · Supply – the amount of a good or service that is offered for sale · Commodity – A raw material that can be bought or sold · Surplus – An excess of production or supply over demand · Market – An area where commercial dealings are conducted
 * Vocabulary: **




 * Evaluation:** As an economist, I think this article shows a good future for China. There are many positive effects from this because of the increase in supply. There will probably be no chance of scarcity for steel output in a while because steel output is still expected to increase. The increase in steel output could be good for China if they wanted to make money from export. There is an increase in price of steel, so producers can benefit from this. Also, despite the possibility of overcapacity of steel output, it would be difficult to happen because China is not running out of space. Also, steel, unlike agriculture, cannot go bad over time. However, if government wants prevent overcapacity, they can use ways such as lowering price of steel so that more people can buy it. They can also tax steelmakers to lower the supply of steel output.