According to a new report issued by the China Iron and Steel Association (CISA), in the January-October period this year China’s crude steel output amounted to 672.96 million mt, up 0.7 percent year on year, while China’s apparent consumption of crude steel totaled 525.65 million mt, increasing by 0.7 percent year on year, reflecting the ongoing oversupply situation in the domestic finished steel market.
According to the CISA’s report, as of the end of October this year overall domestic inventories of the main finished steel products in China totaled 8.89 million mt, down 5.48 percent month on month and rising by 3.16 percent compared to the beginning of the current year.
In October this year, China’s finished steel exports decreased to 7.70 million mt, down 12.5 percent month on month and declining by 14.6 percent year on year. In addition, there is an increasing number of antidumping (AD) investigations against China’s steel exports, which will exert negative pressure on the domestic finished steel market from the supply side.
As also indicated by the CISA, as of November 18 this year the coking coal price in China indicated an increase of RMB 902/mt ($130.91/mt) or 145 percent compared to the beginning of this year, while the composite steel price index (CSPI) for the Chinese domestic market only increased by 58.65 percent over the same period, thereby exerting negative pressure on the margins of steel producers. There is slacker demand for finished steel in China amid colder winter weather conditions, while it is thought that finished steel prices in China will likely indicate some slight fluctuations in the coming period.