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, demand in the January-February period has been stable, while crude steel output has increased by 5.9 percent year on year. The CISA advises steel producers to actively maintain equilibrium between supply and demand, and not to increase their production capacity utilization rates too quickly.
Secondly, as of March 16,the composite steel price index (CSPI) for the Chinese domestic market in the given period was down 4.7 percent compared to the end of 2017. Meanwhile, import iron ore prices for China have almost remained stable in the given period. China imported 185 million mt of iron ore in the January-February period, with the inventory volumes at Chinese ports surpassing 160 million mt by the end of February, indicating that import iron ore prices are unlikely to continue to rise in the coming period.
Thirdly, in February, China’s finished steel export volume amounted to 4.85 million mt, down 34.7 percent year on year. Meanwhile, Donald Trump’s imposition of 25 percent tariffs on imported steel will negatively impact international trade, which is not good news for China's exports.
With oversupply in the steel market expected to continue, it is thought that finished steel prices in China are unlikely to indicate large rises, but will fluctuate slightly in the coming period.