Jiang Wei, vice president of the China Iron & Steel Industry Association, publicly stated at an industry conference last week that China's steel industry is characterized by high output, high costs, and high inventories but low demand, low prices, and low efficiency. The main problem is oversupply of steel, which supports the price of upstream raw materials and inhibits steel prices.

           Currently, the inventory of steel companies is at a historic high for the period, and reducing inventory as soon as possible is the industry's top priority to maintain profitability, Jiang Wei said. He warned steel companies, especially construction steel producers, to reduce production intensity, and ensure that inventories return to normal levels in the second quarter.

            Seaborne iron ore prices have fallen slightly as accumulating port inventories suppressed the price trend. The Kallanish KORE 62% Fe index and KORE 65% Fe index declined by $0.86/t and $0.75/t respectively to $116.68/dry metric tonne cfr Qingdao and $129.25/dmt cfr. The KORE 58% Fe index was $0.61/t lower at $105.21/dmt cfr. Sources report that 90,000t of Mac Fines were booked at $114.6/t with a laycan of 26 May and 4 June.