Chinese steel prices are likely to remain volatile through September in the wake of strong seasonal demand and low inventories and rising steel production, industry sources said.
Crude steel production is expected to increase in September after rebounding in August following two straight months of declines. September and October typically see seasonally strong demand and the government is unlikely to order steel output cuts, market sources said.
Daily pig iron output rose 3.3% month on month to an average 2.35 million mt/day in August, while crude steel production increased 2% from July to 2.680 million mt/day, China Iron and Steel Association data showed.
Pig iron output was up 1.8% on the year in August, but crude steel slipped 0.2% over the same period, according to the CISA.
Finished steel inventories at steel mills and spot markets monitored by the CISA fell 7.2% from end-July and 1% from a year ago to 25.13 million mt Aug. 31.
Some sources expect China’s September crude steel output to rise to nearly 3 million mt/day, largely offsetting pricing gains due to recovering demand.
“Due to the drag from the debt-laden property sector and another round of COVID resurgence, end-user demand, especially for long steel, has been modest so far in September,” a market participant said. “Oversupply could surface again if demand fails to improve further.”
Post time: Sep-09-2022