FEARS that lower consumption and increased production of steel in China could lead to global oversupply of the metal left Corus Group with the worst fall in an otherwise becalmed FTSE 100.

Much of the rise in steel prices over the past two years — which helped the Anglo-Dutch producer to regain its place in the benchmark index earlier this year — has been laid at the door of China, whose apparently insatiable demand for raw materials has made it a large importer of the metal.

However, analysis by UBS suggests that China has become an exporter of steel in recent months, owing to a sharp slowdown in demand and a rise in domestic production. The Swiss investment bank estimates that production will have increased 22 per cent during 2004 and is set for a further 14 per cent rise in 2005.

Those predictions have been given weight by plans by Baosteel, China’s largest steelmaker, for a $10 billion expansion programme in Guangdong.

With investors worried that steel prices could fall by as much as $200 a tonne next year, Corus faded ½p to 51¾p. The FTSE 100 traded in a narrow 13-point range throughout the session and closed just 0.3 better at 4,820.1, making its seventh consecutive gain.

Illiquid conditions around Christmas and new year can make it notoriously difficult to trade and that seems to have been especially the case with Alliance UniChem, the pharmaceuticals distributor and retailer. Although the shares closed on Wednesday at 751p, a sell order at yesterday’s opening auction in just 458,000 shares swiftly pulled the price down to 714½p. However, with that seller out of the way, the shares recovered to settle 7½p up at 758½p, one of the best blue chip rises.

However, the top slot was taken by Man Group, the hedge fund manager, 29p dearer at £14.68 after Wednesday’s after-hours disclosure of the 1.94 per cent weekly rise in the net asset value of its flagship AHL fund.

Reports of strong sales at Baltic Beverages Holding, its Russian beer joint venture with Carlsberg, helped Scottish & Newcastle up 1p at 435p. Preliminary indications are that sales in Russia have risen 23 per cent over the year. Further, BBH is expected to have sold nearly two billion litres of beer this evening, a new record.

AstraZeneca put on a further 10p to £18.90 after Japan’s health authorities gave conditional approval to its Crestor anti-cholesterol treatment.

BT Group hardened ½p to 203¼p as it continued with its share buyback programme, repurchasing a further one million shares through Cazenove, its joint house broker, at 202.82p.

• NEW YORK: Stocks clung to small gains in seasonally slow trading. The Dow Jones industrial average closed down 28.89 points at 10,800.30.

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