Posted on 28 Sep 2023
China's steel prices are expected to keep fluctuating in the near term with uncertainties at home and abroad, according to the latest monthly report of the China Iron & Steel Association (CISA).
The persistent rise in Chinese steel prices is unlikely to continue in the foreseeable future with the on-going impact of slowing economic growth in Europe and the United States, high global inflation and geopolitical conflicts, the association noted.
In parallel, the recovery in domestic steel demand from downstream industries was slower than the market had expected, especially for the persistent weakness in the country's property sector, which dragged down steel consumption, according to the report.
China's steel market still faces great pressure from the intensified imbalance between supply and demand with the high-level steel output, the association warned.
Over the first ten days of September, daily crude steel output among CISA's member steel mills came in at 2.16 million tonnes/day on average, up 5.5% from late August. Based on this data, the association estimated that the country's daily crude steel production increased by 3.7% during the same period to average 2.93 million t/d in early September, as Mysteel Global reported.
Steel inventories held by both Chinese steelmakers and traders stayed high in early September, piling pressure on the domestic steel market.
As of September 10, the inventories of the five major steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate held by CISA's member mills registered 15.8 million tonnes, higher by 7.3% from the end of August.
Although stocks of the five steel items in the 21 Chinese cities under CISA's survey edged down 0.5% from late August to 9.57 million tonnes in early September, the decrease was limited.
Besides, the prices of imported iron ore have been hovering high, placing more pressure on domestic steel producers. For August, the average price of imported iron ore reached $107.9/tonne, higher by 17.2% from last December, while domestic steel prices had slipped by 4.3% from the same month, CISA's release showed.
Still, the association believes that demand from downstream users may recover gradually in the coming term thanks to the country's steady economic growth with Chinese governments introducing a series of stimulus measures. Meanwhile, the increasing prices of steelmaking raw materials may also lend some support to China's finished steel prices.
Source:Mysteel Global
