According to the report issued by the China Iron and Steel Association (CISA) on April 8, China's hot rolled market has seen steady increases in supplies compared to demand since the beginning of the current year. Despite some rebounds seen in January-to-middle of February, flat rolled prices in the domestic market have subsequently moved down suddenly, especially as regards HRC prices which have registered the biggest decrease. Confidence levels in the domestic market have been hit significantly, given the considerable increase in hot rolled output, the slow demand, the rapid increase in flat rolled inventories and the large tonnages of low-priced import offers. The result has been a steady decline in prices. Due to the strong levels of supply compared to demand, the market is now coming under increasing pressure.
In the international market, flat rolled demand has also trended down, with few orders concluded. It is reported that global demand for seamless steel pipes will undoubtedly decline in 2009 in line with the shrinkage of crude oil demand. Besides, as the consumption of oil well tubes has shrunk greatly across the world, tube and pipe prices have registered an accelerated decrease. Meanwhile, due to the strict protective measures taken by many governments aimed at protecting their domestic steel pipe industry, it is now very hard to envisage flourishing export markets.
On the positive side, demand in the longs markets is good, at least compared to demand in the flats markets. Following the various economic stimulus plans announced by many governments, consumption of construction long products in 2009 is expected to show a moderate revival.