Posted on 03 Mar 2022
In March, China's domestic steel prices still stand probable chances of rebounds after an overall softening in the prices of both the finished steel products and most steelmaking raw materials other than coke last month, mainly because of probably better demand while output still under watch, Wang Jianhua, Mysteel's chief analyst, shared in his monthly market outlook.
China's steel prices have not been under much pressure as of now, as in February, China's steel supply had not comparatively low though demand had been dismal too, according to Wang.
Output of five major steel products including rebar, wire rod, hot-rolled and cold-rolled coils and plate approximated 35.8 million tonnes against 40.9 million tonnes around the comparable period of 2021, and the inventories of these five steel products at a small-scale of traders and steel mills were about 24 million tonnes by the end of February, or down 7 million tonnes on year, both according to Mysteel's data.
For March, China's steel output will still be constrained by the series of political, sport events and ongoing winter restriction measures, and on the other hand, the domestic steel mills will be with limited enthusiasm of ramping up output when steel margins are low, Wang pointed out, adding that as of February 25, rebar margin among China's electric-arc-furnace (EAF) steel mills under Mysteel's survey averaged Yuan 41/tonne ($6.5/t).
Under the circumstances, hot metal output among China's blast-furnace steel mills under Mysteel's tracking may recover to around 2.19 million tonnes/day for March from 2.08 million t/d in February, though this will still be much lower than the 2.37 million t/day in March 2021, Wang said, adding that steel output from China's EAF steelworks may glow less than 10% on month.
Domestic steel demand, in contrast, will most probably revive by about 15% on month in March, especially from the sectors of domestic infrastructure construction as well as property development especially in the Chinese cities other than those top-tier few, he predicted.
Other than fundamentals in the domestic market, the tensions between Russia and Ukraine, if further escalating, may impact the global supply of a series of products including steel, iron ore, nickel, aluminum, oil and gas and push up their prices both in the global and Chinese markets as a result, he added.
Source:Mysteel Global
