According to a new report issued by the China Iron and Steel Association (CISA), the steel prices in August have seen a slight downtrend, shifting from a rise recorded in July, amid the decreasing demand in the given month.
There are a number of factors that participants in the Chinese finished steel market should pay attention to in the September, the CISA stated.
First of all, inventory levels of finished steel have decreased. As of September 10, the finished steel inventories of large and medium-sized steel enterprises in 20 cities of China amounted to 11.38 million mt, decreasing by 360,000 mt or 3.1 percent compared to August 31, while down 8.4 percent compared to the same period of last year.
Secondly, according to CISA, CISA members’ average daily crude steel output amounted to 2.0449 million mt the September 1-10 period, down 0.38 percent compared to late August (August 21-31). The crude steel output has seen continuous declines, while the slackening demand in local and overseas markets offset the impact of decreasing output.
Thirdly, the China Iron Ore Price Index (CIOPI) stood at $152.3/mt as of August 31, decreasing by 14.97 percent month on month, while up 24.97 percent year on year. Though import iron ore prices decreased sharply, coking coal prices have seen big rises, resulting in relatively high level of production cost of steel, which prevented prices for steel production from sharp fall.
It is expected that China’s steel prices will fluctuate within a limited range in September, even despite the decreasing steel output due to the expected production restrictions, as demand is expected to also be limited.