Finished steel product prices in China in April turned from an upward trend to a downward trend due to slowing market demand along with relatively high steel production during the period, according to the China Iron and Steel Association (CISA).
From January to April this year, the average daily crude steel production of member steel companies of China Iron and Steel Association in China was 2.3294 million tons, up 2.2% compared to 2.2783 million tons recorded in January-March, as the real estate industry has a negative impact on steel demand.
At the same time, steel demand growth slowed down in the industrial and infrastructure sector, and the association urged steel manufacturers to thoroughly analyze the supply and demand situation and take adequate measures to maintain the smooth operation of the steel market.
The average imported iron ore prices rose to $120.5/tonne in April, up $28.4/tonne or 30.9% compared to December last year, while the finished steel product prices decreased by 1.85% in the indicated period.
The sharp imported iron ore prices had a clear negative impact on the steel companies’ earnings, and with the advent of May, raw materials prices fell at a faster rate, thus weakening the final steel support.
On May 10 this year, domestic inventories of major finished steel products in 21 major cities in China totalled 11.30 million tons, down 210,000 tonnes or 1.8% compared with April 30, according to data from the association, which may ease downward pressure on steel prices.
It is believed that steel prices in China will probably stop declining and stabilize in May.