CHINA'S austerity programme has put a damper on Linkful International Holdings' mainland steel sales, with the company now shifting its focus to Thailand and the United States. Executive director Christopher Chan said in the first half of the year Linkful suffered a drop of about 10 per cent in volume sales of steel products in China and posted a drop of also about 10 per cent in prices because of the credit squeeze policy. China accounted for half of Linkful's sales last year, but Mr Chan expected the contribution from the mainland would decline next year because of a continued squeeze on credits, leading to suspension of construction projects in the country. ''There will be no speculative buying next year. The market situation will be similar to that in the second half of this year,'' he said. China engaged in a buying spree of steel products early last year, as the country's economic development charged ahead. But the steel industry was severely affected in the second half of last year, when the government launched measures to rein in rampant inflation. Earlier this year, China also capped the price of steel products. Although China was a net importer of steel products, it was also exporting to clear enormous stockpiles and realise cash-flow for cash-strapped steel mills, said Mr Chan. ''Rain or shine, [we are] still a steel trader,'' he said, adding that Linkful now exported steel products from China, in addition to selling them to the country. He was bullish about China's steel industry, because the mainland remained a net importer of steel products with demand outstripping supply. ''There is basic demand for steel products, as long as the economy is functioning.'' Mr Chan said Linkful would have steady business with Thai steelmaker Sahaviriya Steel Industries next year, because it would undertake shipments for the company, which was held by the Wit Viriyaprapaikit family, Linkful's majority shareholder. He expected Linkful would trade 2.7 million tonnes of steel next year, with one million tonnes going to Thailand. Meanwhile, the US accounted for 10 per cent of trading volume. In a bid to strengthen its position in China, Mr Chan said Linkful was negotiating to take a stake in a berth in Zhangjia port in Jiangsu province, where the company had two steel-making joint ventures. He said Linkful would have an interest of more than 50 per cent in the berth, with an annual handling capacity of 600,000 tonnes, through a vehicle partnered with the Jiangsu government and a branch of the Bank of China. The project would not cost more than US$10 million. ''Logistical support is very important to the future development and market expansion of steel-making enterprises, because China's infrastructure has yet to be fully developed,'' Mr Chan said. He said the funds would be used for buying machinery which was suitable for steel trading. Linkful has three steelmaking joint ventures in the mainland, two in Jiangsu and one in Tianjin, with an eventual production capacity of 1.3 million tonnes.