According to the China Iron and Steel Association (CISA), steel market prices will continue to fluctuate in the next two months, with Chinese market to enter in the season of low steel consumption.
CISA noted that the Chinese steel market is to be influenced by the energy saving and emission reduction policy, as well as by the restriction on real estate and credit. The demand will decrease and steel products export and import will stay at a low level. However, the continuing increase of iron ore prices is to support steel prices to a certain degree.
According to CISA'a data, at the end of October this year, the total inventory of five main steel products in 26 major cities in China amounted to 14.59 million mt - down 190,000 mt, or 1.27 percent month on month. Rebar and wire rod inventories were down 7.55 percent and 1.12 percent month on month respectively, HRC inventories were up 1.28 percent month on month, while hot rolled plate and cold rolled sheet inventories were up 6.9 percent and 5.16 percent month on month respectively.
As a regard to the future, CISA said that the economy is developing quickly and stable, which means the demand is still high. The restriction on output starting from October eased the conflict between supply and demand to a certain degree.
In addition, CISA said that it expects the country's steel production to remain at a low level in the next two months, being influenced by energy saving and emission reduction policies, by backward capacity elimination, and by the mills' overhaul works carried out at the end of the year. Steel products export will also stay at low level.
CISA reminded that the RMB credit policy and exchange rate adjustment, as well as the import iron ore price increase should be concerned.