According to a new report issued by the China Iron and Steel Association (CISA), in May China produced 61.73 million mt of pig iron, 72.26 million mt of crude steel and 95.78 million mt of finished steel, decreasing by 0.1 percent, increasing by 1.8 percent and decreasing by 1.9 percent year on year, respectively.
According to data issued by Chinese customs, in May this year China’s finished steel exports amounted to 6.98 million mt, up 7.55 percent month on month and declining by 25.9 percent year on year. In May, China’s finished steel imports totaled 1.11 million mt, up 2.78 percent month on month and 1.8 percent year on year. The net finished steel exports for the month were equivalent to 6.09 million mt crude steel, up 8.6 percent month on month. Based on these data, in May China’s domestic crude steel supply amounted to 67.17 million mt, down 4.67 percent month on month, reflecting an easing of the oversupply in the domestic market.
According to the CISA’s report, as of the end of May this year overall domestic inventories of the main finished steel products in China totaled 10.29 million mt, down 37.82 percent compared to the peak level in February. Although inventory was still higher compared to both the beginning of this year and the same time last year, it has been moving on a declining trend since February, easing the supply pressure in the Chinese market.
However, crude steel output is still at high levels. Meanwhile, finished steel prices have shown a declining trend amid the decreasing trend of raw material prices. Moreover, the rainy season in the Yangtze river region will result in slacker demand for finished steel as construction activities will be affected. It is thought that finished steel prices in China are unlikely to move up in the coming period, but will indicate a fluctuating trend instead.