Macro-economic policies also affect China's section steel market

SteelOrbis Shanghai With the reversion in Chinese steel market, the large- and medium-sized section steel prices began to decrease in the end of June. At present, the cumulative decrease range of major products is around RMB 20-200/mt ($$3-25), among which minor reduction for large-sized section steel and larger for medium- and small-sized. Restricted by the macro-control measures of Chinese government, the steel mills, traders, and end-users are all affected to a certain extent. On the end-users side, the tight capital and purchase slowdown caused the decline in demand; with the capital pressure, traders are hurrying to sell their products at lower prices, directly leading to the price decline; the steel mills had to lower the ex-factory prices because of the tight capital and sales pressure, meanwhile, with the sharp decrease in semi finished steel prices, the profits for rolling mills increased, resulting in larger decline range for steel mills. With the execution of macro-control measures, and the coming of the slack season for steel demand, the pressure onto the steel market strengthened. The margin of decline is smaller for large and medium sized section steel prices, because they lagged behind those of other products. However, the decline is likely to continue in the future. Overall, following the other products, Chinese section steel prices will be in the downward trend in July and August.