The China Iron and Steel Association (CISA) has predicted that in the fourth quarter this year the Chinese domestic steel industry will continue to operate at low capacity utilization rates due to the central government policy aimed at saving energy and reducing emissions. Due to this policy, many domestic steel mills have reduced their production or have started to carry out overhauling work on equipment. In this context, as the CISA commented, domestic steel production will continue to maintain reduced output levels, which, moreover, will help to ease the imbalance between supply and demand in the domestic market.
On the demand side, the CISA predicted that domestic steel demand will continue to rise; however, due to the influence of factors such as raw material costs, high steel inventory and weak winter consumption, steel product prices in the fourth quarter are expected to trend sideways with minor fluctuations.
The China Iron and Steel Association also stated that in the fourth quarter of the current year Chinese national policy as regards export rebates for steel products is not expected to change much. It went on to say that the narrowing price gap between domestic and international prices will contribute to increasing export costs. Also, international trade protectionism will also influence exports, the CISA said. Thus, the prospects for Chinese steel exports in the fourth quarter do not appear promising, it concluded.