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 the first quarter of the year China’s crude steel and finished steel outputs indicated year-on-year rises of 5.4 percent and 4.7 percent, respectively, showing steelmakers’ willingness to increase their outputs. The CISA advises steel producers to slow down the increases in their production capacity utilization rates and maintain equilibrium between supply and demand.
Secondly, in the first quarter China imported 271 million mt of iron ore, while inventory levels at ports amounted to around 160 million mt as of March 31, and so import iron ore prices are unlikely to see big rises in the coming period due to sufficient supply.
Thirdly, in the given quarter China’s finished steel export volume amounted to 15.148 million mt, down 26.4 percent year on year, continuing its declining trend. Meanwhile, US-China trade frictions have increased, which is not good news for China's exports.
With oversupply in the steel market still expected to continue, it is thought that finished steel prices in China are unlikely to indicate big rises, but will fluctuate slightly in the coming period.