Chinese steel prices decline under new policies

Chinese steel prices decline under new policies

Following Beijing’s macro-control measures, the steel prices in China’s major markets have retreated significantly. For example, eastern China saw a RMB 70 ($8.46) fall per ton in steel prices following the export tax rebate annulment that took effect on April 1. According to Shanghai Steel Electronic Trading Market (SSETM), over the past month the average price of plates in the Chinese domestic market fell RMB 400 ($48.37) per ton, a year-on-year decline of nearly 6%. The price of cold-rolled plate dropped RMB 1’000 ($121) in northern China. The new macro-controls are expected to eat into the Chinese steel industry’s profits to the tune of between RMB 3 billion ($362.76 million) and RMB 4.7 billion ($568.3 million) this year. SSETM anticipates that steel prices will continue to fall due to increasing supply and dwindling demand. The organization adds that there are 460’000 tons of steel stockpiled in Beijing, 160,000 tons in Tianjin, 400’000 tons in Shanghai, 500’000 tons in Guangzhou, and 150’000 tons in Shenyang.