Steel market in China will perform better in H2

Friday, 18 September 2020 12:02:54 (GMT+3)   |   Shanghai

He Wenbo, executive president of the China Iron and Steel Association (CISA), said at a recent seminar on the domestic, import and export steel markets held in Beijing that Chinese steelmakers should make new arrangements to accelerate the formation of a new development pattern with the main focus on the domestic market, while also focusing on both the domestic and international markets at the same time.

Representatives attending the seminar agreed that steel market in the second half of the current year presents a pattern of increasing demand, sufficient supply, decreases in inventory which still remain at high levels, and declines in profitability which still tends to be steady, concluding that the performance in the steel market will be better than in the first half this year.

However, attendees agreed that there are several major problems which will affect the steel market. First of all, the spread of the Covid-19 pandemic in overseas markets will exert a negative impact on the global economy. Secondly, uncertainties have increased across the world due to the backlash against globalization. Thirdly, production costs of steelmakers continue to increase, while the shortage of raw material supply has not eased yet: for instance, coke prices are expected to rise due to production restrictions in the provinces of Shandong and Hebei. Fourthly, low industrial concentration still exists in the steel industry.

Mr. He said demand for steel will indicate a slight growth in 2020, indicating that the increasing outputs of steel will gain support from the demand side. Meanwhile, he suggested steelmakers should ensure the release of production at a reasonable rate. 

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