Chinese domestic steel prices have been on a downward trend ever since the start of 2024, despite the country’s pig iron and crude steel production over January-February remaining at relatively low levels.

The drag from the debt-ridden property sector and local government downsizing infrastructure projects has been the main culprit behind the weak steel market conditions, some trading and mill sources said.

Market sentiment has remained bleak so far in March, with no signs of demand improvement being seen from construction sites, sources said. If the central government does not introduce more aggressive stimulus to boost infrastructure construction, steel demand is unlikely to have substantial improvement this year, and thus would continue to weigh on steel prices and production, some market sources said.