Steel Prices May Stabilise Amid Ongoing News of Production Restriction

SHANGHAI, Apr 11 (SMM) - Steel prices plummeted last week and the average price of SMM rebar and HRC both fell about 114 yuan/mt. At the beginning of last week, the March Caixin manufacturing PMI stood at 50, which was lower than expected. Rumours of tightening regulation on iron ore prices and price cut of coke drove down the costs of steel mills. Meanwhile, the Qingming holiday and rainy weather weighed on the terminal demand, pulling down the steel prices. But later the news of crude steel production cut made the steel prices stop falling and stabilise. Iron ore and coke prices may be under pressure in the short term, and thus the cost support for finished steel will weaken. But the demand may recovery after the impact of rainfall weakens this week. As such, steel prices are expected to stabilise. In particular, the demand for HRC will be better as it is less affected by the weather. Driven by profits, more pig iron will be used to produce plates. But the sustainability of high HRC demand remains to be seen.