As of the end of the second week of June, the composite steel price index for the Chinese domestic market issued by the China Iron and Steel Association (CISA) declined to below 100 points, indicating the lowest level since June 2009. As of the end of May, the composite steel price index for the Chinese domestic market decreased by 3.92 points month on month to 101.83 points, while at the end of April the composite steel price index had declined by 1.42 points compared to the end of March.
In the second quarter, demand in the Chinese steel market has witnessed a slight improvement, though the market still faces an imbalance between supply and demand as the increase in demand from the main steel consuming sectors has been lower than expectations and as the output of Chinese mills has remained at relatively high levels.
The CISA stated that the oversupply situation in the Chinese steel market may continue. Meanwhile, Chinese steel exports face challenges due to increased trade protectionism. Also, iron ore import prices may decline further.
The CISA predicts that, with some Chinese mills starting to reduce output and with some easing of the oversupply situation, steel prices in the Chinese domestic market appear to be nearing the bottom. In the coming period, the Chinese domestic market is expected to maintain its current low price levels amid some fluctuations.