SHANGHAI, Aug 22 (SMM) – Steel prices across Chinese markets are likely to steady in slightly seesaw trade, in anticipation of a more balanced and stable market as the intensification of smog-control measures ahead of the 70th country founding anniversary will weigh on production, China Iron and Steel Association (CISA) said in its monthly market commentary.
The industry association’s China Steel Price Index (CSPI) has been trending downwards since the second week of July, and stood at 106.58 for the third week of August, according to the monthly report released on Tuesday August 20.
China will celebrate the 70th anniversary of its founding in October, prompting regions near the capital city of Beijing to step up their efforts to improve air quality. This is expected to lower steel production, as major steelmaking hubs, such as Tangshan, Wu’an and Handan ramp up production curbs.
CISA data showed that daily output of crude steel across the country averaged 2.75 million mt in July, down 5.8% from the record high in June but notching the fourth-highest in history.
As of August 16, social inventories of steel products stood at 15.69 million mt, up 3.04% or 460,000 mt from the end of July.
CISA expressed its concerns about demand, given weaker exports and the dispute with the US. Data showed that China’s exports of steel products shrank 2.9% year on year to 39.97 million mt in the first seven months of 2019, 0.3 percentage point larger than the decline in January-June.
A slew of stimulus measures from central authorities to boost the slowing economy, however, are expected to keep demand for steel stable, CISA believes.