According to a new report issued by the China Iron and Steel Association (CISA), in August this year China’s crude steel output increased by 2.63 percent month on month and rose by three percent year on year, reflecting the ongoing oversupply in the domestic market.
As of August 31 this year overall domestic inventories of main finished steel in China totaled 9.36 million mt, up 5.77 percent month on month and rising by 8.54 percent year on year. While China’s finished steel exports amounted to 9.01 million mt, down 12.5 percent month on month and decreasing by 7.4 percent year on year.
Meanwhile, as of September 16 average prices of coking coal and metallurgical coke increased by RMB 195/mt ($29.24/mt) and RMB 352/mt ($52.78/mt), up 27.86 percent and 38.18 percent compared to the beginning of August, while the composite steel price index (CSPI) for the Chinese domestic market only increased by 5.16 percent, exerting negative pressure on the margins of steel producers. In addition, there is an increasing number of antidumping (AD) investigations against China’s steel exports, which will exert negative pressure on the domestic finished steel market from the supply side. It is thought that finished steel prices in China will likely indicate some slight fluctuations in the coming period, as stated by the CISA.