Finished steel prices in China in May continued the downward trend amid the slack demand from downstream users and relatively high outputs of steel, as stated by the China Iron and Steel Association (CISA).
In May this year, the average daily crude steel output in China amounted to 2.907 million mt, down 5.9 percent month on month.
In the given month, the raw material prices continued the declining trend, weakening the support to steel prices. Average imported iron ore prices increased to $116.9/mt in May, down by $3.6/mt or 3.0 percent compared to April. Entering June, import iron ore prices moved up sharply, which exerted a negative impact on steelmakers.
The performance of the real estate industry continued to remain weak, negatively affecting the demand for steel. Meanwhile, the growth in demand for steel in the manufacturing and infrastructure industries slowed down. Thereby the CISA urged steelmakers to be cautious in expanding the production, aiming to maintain the steady operation of the steel market.
On June 20 this year, overall domestic inventories of the five main finished steel products in 21 major cities in China totaled 9.56 million mt, down 330,000 mt or 3.3 percent compared to June 10, according to the CISA data, which might ease the downward pressure on steel prices.
It is expected that steel prices in China will likely see a fluctuating trend within a limited range in June.
