Finished steel prices in China edged up slightly in December last year, while they shifted into a declining trend in January this year as the Chinese New Year holiday (February 9-16) approached, as stated by the China Iron and Steel Association (CISA).
Demand for finished steel from downstream users was slack in January amid construction sites halting their activities due to the approaching long holiday and the widespread snowy and rainy weather conditions across China, while production activities also slowed down, resulting in a weak situation for both supply and demand.
At the same time, inventory of steel increased: for instance, inventories in 21 major cities of China amounted to 8.23 million mt on January 20, up 5.4 percent compared to January 10, exerting a negative impact on steel prices.
As for February, production capacity utilization rates of steelmakers will be at low levels, while demand will also be quiet, and so steel prices will likely move sideways, though market players think steel prices will likely edge up after the long holiday, especially in March amid the anticipated improvement in demand.