The China Iron and Steel Association (CISA) has stated that average steel prices in the Chinese domestic market have already declined to cost levels, with only limited room available for further downward movement in steel prices. Since some steel mills are keeping their outputs under control by implementing production cutbacks or stoppages or by carrying out overhauling works, it is expected that domestic steel market prices will fluctuate within a narrow range in the near future, the CISA said.
According to the CISA data, inventories in the domestic steel market in June declined slightly but remained at a relatively high level. By the end of June, the aggregate inventories of five steel product categories in the 26 main steel markets in China totaled 15.72 million mt, down by 60,000 mt or 0.4 percent month on month but up 75.3 percent year on year. The high level of inventories has been exerting significant pressure on steel prices in the Chinese domestic market.