In early July this year, China’s domestic finished steel prices indicated a declining trend, falling to their lowest levels since 2000. Billet prices in Tangshan, Hebei Province decreased as low as RMB 1,670/mt ($269.4/mt) on July 8. However, in mid-to-late July, due to bullish trend in the stock market in China, prices of finished steel and iron ore bottomed up against the backdrop of increased maintenance work being carried out by steelmakers, which reduced supply to the finished steel market, thereby easing the imbalance between supply and demand, according to a statement issued by the China Iron and Steel Association (CISA) on August 6.
Currently, confidence in the Chinese steel market has improved and local finished steel prices will likely edge up in the short term, the CISA said.
However, demand for finished steel from downstream industries, including machinery, automotive and household appliances, has been sluggish and so some of the main domestic steelmakers are still pessimistic as regards the prospects for the market in the future. Accordingly, it is thought that the current increase in finished steel prices may just continue in the short term.