China's domestic steel market still shows no positive uptick after eight weeks' continuous drop. Steel prices in major markets fell slightly again.
In Beijing, the prices of HR sheet and medium-heavy plate dropped by CNY 50 per tonne from the day before, that of checkered plate declined by CNY 100 per tonne and that of low alloy plate down by CNY 150 to 200 per tonne. Meanwhile, the price of colour-coated sheet and H-beam also saw decreases, with other products staggering along the bottom level.
In Nanjing, the price of rebar dropped by CNY 20 to 60 per tonne, that of round steel declined by CNY 110 per tonne, that of common medium plate decreased by CNY 20 to 100 per tonne while that of some low-alloy plate plunged by CNY 500 per tonne. In the Guangzhou market, wire rod, high-speed wire rod and common medium plate all dropped slightly. The price of HRC dropped CNY 30 to 150 per tonne while that of other products remained flat.
Top steelmakers such as Baosteel and Shagang all cut their price last week.
Insiders say the huge production capacity and weak demand are the major problems facing the steel industry at the moment and it is hard to say when the global market will start to recover. However, steel inventory in major cities is starting to fall. In the Shanghai market the inventory of rebar was recorded at 424,600 tonnes, down by 3.3% from last week and that of HRC was 763,860 tonnes, down by 2.8% from last week. Analysts said the inventory drop will help support the price.
The China Iron and Steel Association said that to tackle the current difficulties, steel mills should arrange their productions according to market demand and optimise their product mix to expand the export.
According to the statistics from General Customs, China's steel exports witnessed a cumulative drop of 52% in the first 2 months of 2009, while in February the export volume dropped 49.6% YoY or 18.1% MoM to the lowest level since November 2005.
General Customs attributes the soft demand to the weakening global demand, emerging protectionism, the currencies' depreciation in neighbouring countries and the high duty on low value added products export.
Source: Steel Guru
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