Posted on 21 Sep 2022
China's steel prices are expected to remain rangebound in the coming term as the fundamentals may improve with the gradual recovery in demand, according to the latest monthly report of the China Iron & Steel Association (CISA).
Although many uncertainties exist, the domestic economy is expected to recover gradually as the government continues to implement a series of measures to boost economic growth, CISA believed.
As for the country's steel-consuming industries, infrastructure construction, machinery manufacturing and the auto assembly and shipbuilding sectors have been recovering, lending some support to steel demand, the association noted. However, the downtrend in real estate and home appliance and container manufacturing continues.
A new balance between supply and demand may emerge in the coming term with the slight recovery in domestic steel output, CISA pointed out.
For the first ten days of September, daily crude steel output among CISA's member steel mills reached 2.1 million tonnes/day on average, up 3.3% from that for late August. Based on this data, the association estimated that daily crude steel output nationwide increased by 0.9% during the same period to average 2.81 million t/d in early September.
Steel inventories held by domestic traders continued to move down in early September, with the volume of the five key steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate in the 21 Chinese cities under CISA's survey falling to 8.8 million tonnes as of September 10, lower by 4.2% from that for late August, or down 23.9% on year.
However, finished steel stocks held by CISA's member steel mills have been fluctuating, with the total tonnage of the five major steel items reaching 17.1 million tonnes as of September 10, higher by 7% from ten days earlier.
For the coming term, Chinese steel mills should take measures to maintain domestic market stability. "Steel prices retreated slightly in September, indicating the fragile balance between supply and demand," CISA warned.
Besides, the rebound in prices of coal, coke and ferrous scrap have also placed more pressure on domestic steelmakers to lower their production costs, the association said in the report.
Source:Mysteel Global
