According to a new report issued by the China Iron and Steel Association (CISA), there are three factors that participants in the Chinese finished steel market should pay attention to in the coming period.
First of all, in April, average daily output of crude steel in China amounted to 2.5567 million mt, surging to its highest historical level as Chinese steelmakers have been stepping up production to take advantage of high profitability after the winter output restrictions. The increased output will exert a negative impact on the steel market.
Secondly, import iron ore prices are at relatively high levels already and are unlikely to indicate big increases in the coming period.
Thirdly, in the first four months of the current year China’s finished steel export volume amounted to 21.624 million mt of finished steel, down 20.1 percent year on year, continuing its declining trend. Meanwhile, US-China trade frictions will still negatively affect China's exports.
Meanwhile, as of May 11, finished steel inventory has dropped to 12.71 million mt, down by 5.28 million mt or 29.35 percent compared to the end of March, while increasing by 4.77 million mt compared to the beginning of this year, up 60.06 percent, and up 1.37 million mt or 12.06 percent compared to the same date last year. Inventories of finished steel are still at high levels, which will continue to exert a negative impact on the steel market. It is thought that finished steel prices in China are unlikely to indicate big rises in the coming period.