China’s steel market price dropped in the week ended September 2, mainly due to the rebound of the epidemic restricting demand and increasing market supply.
From the recent market, Chinese steel market is in weak balance. First, the current round of epidemics has spread, and Chengdu, Zhengzhou, Shijiazhuang, Tianjin, Wuhan and other cities have implemented static management or control measures, which have a significant impact on downstream demand and market sentiment. Second, market supply continued to increase following the growing operating rate both in BFs and EAFs.
According to SteelHome survey, the inventories of five major steel products totaled 18.58 million tons in the week ended September 2, down 100,000 tons from last survey.
There are also some positive factors on the current market. First, the current market price is lower than the mills’ production cost, which is expected to slow down the production resumption process of steel mills. Besides, the State Council went to various places to review the implementation of policies to stabilize economic growth, and projects started in the early stage are expected to be landed more quickly.
In general, SteelHome believes that China’s steel market prices will stop falling and maintain steady this week.