(People's Daily Online, Oct 30, 2006) Two research reports released by the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOC) predict that the price of capital goods in the fourth quarter will remain stable.

The price of capital goods in China rose sharply in the first half of the year and dropped slightly in the third quarter. The price over the first three quarters was up 2.52 percent on last year.

According to the NDRC report, the average price of steel reached 3,948 yuan (493.5 U.S. dollars) per ton at the end of September, up 6.27 percent from the beginning of this year and slightly lower than last year.

The price of non-ferrous metals rose sharply during the first five months. After dropping in June, the price has continued to rise in the subsequent months.

The price of copper at the end of September was 61 percent higher than at the beginning of the year. Aluminium was up 7.9 percent, zinc up 66.12 percent and nickel up 133.66 percent.

The price of petroleum and refined oil products rose by 23.07 percent year-on-year in the first nine months. The growth is 7.76 percent higher than the same period last year.

The NDRC report said that as the macro-economic control measures of the government have begun to take effect, the rising price of capital goods has been restrained even though the booming economy continues to keep the price at a high level.

The stabilization of capital goods prices on the international market and the domestic supply of coal, electricity and petroleum are restraining further price rises for capital goods, said the report.

The NDRC report predicted a three percent price rise for the whole year and a four percent rise for the first half of next year.

According to the report, the price of steel products has risen only moderately due to slower output growth in the third quarter.

However, as price rises will encourage more domestic output and the move to reduce the tax rebate rate of steel products take effect, the price of steel will be stable in the fourth quarter with slight fluctuations, according to the NDRC.

The prices of non-ferrous metals and refined oil products have risen to a high level and there is little room for a further increase, said the report of the MOC.

The NDRC report said that lower expectations for a rise in the international oil price will reduce the pressure for rise in the price of domestic refined oil products.
source:People's Daily Online