CISA: little chance of further steel price hike

16:44, April 20, 2010      

Email | Print | Subscribe | Comments | Forum 

Supply still exceeds demand in China's steel market and there is little possibility for an aftermarket price hike, according to a report released by the China Iron and Steel Association (CISA) yesterday.

Due to continued growth in production, high inventories and low export volume for steel, supply is likely to continue to exceed demand.

The growth of the Chinese economy maintained momentum in March. Due to increasing demand for steel products in the hot season plus rising iron ore costs and steel prices in the international market, domestic steel prices have increased rapidly, steel inventories have dropped slightly and steel exports have risen.

The report noted that costs of raw materials needed for steel production – especially iron ore, coke, steel scrap and seaway freight – are on the rise currently, putting steel mills under huge pressure. Although a steel price hike may transfer some of steel mills' cost pressures to downstream industries, steel price increases are limited by what consumers can afford to pay. Therefore, China's steel industry still faces a very serious situation.

Although the global economy has entered the recovery stage, market demand hasn't been fully restored. However, steel output in major steel-producing countries continues to rise month-by-month adding more pressure on China's steel exports. With increasing global trade disputes, trade protectionism and climate change, the outlook for China's steel exports is not optimistic.

However, every coin has two sides. China's recovering economy feeds the growth of domestic steel demand; raw material price hikes increase the cost of steel; the rebounding global economy is also beneficial for expanding steel exports.

In addition, steel inventories have begun to decline. Total inventories at China's 26 major steel markets amounted to 1.729 million tons, down 800,000 tons over the previous month, decreasing by 4.42 percent. The CISA pointed out that steel inventories' decline showed that market demand was starting to pick up.

People's Daily Online


  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • On Sept. 26, a resident passes by a flower terrace decorated for the coming National Day. (Xinhua/Hang Xingwei)
  • The photo, taken on Sept. 26, shows the SWAT team ready for the joint exercise. (Xinhua/Wangkai)
  • Two metro trains in Shanghai collided Tuesday afternoon, and an identified number of passengers were injured in the accident, the Shanghai-based reported. Equipment failures were believed to have caused the crash on the Line 10 subway, Xinhua quoted local subway operator as saying.
  • An employee at a gold store in Yiwu, located in east China's Zhejiang province, shows gold jewelry on Monday.(Xinhua/Zhang Jiancheng)
  • Tourists ride camels near China's largest desert lake Hongjiannao in Yulin, north China's Shaanx Province, Sept. 24, 2011. Hongjiannao is shrinking as a result of climate change and human activities, and may vanish in a few decades. Its lake area, which measured more than 6,700 hectares in 1996, has shrunk to 4,180 hectares. Its water level is declining by 20-30 centimeters annually and its water PH value has risen to 9.0-9.42 from 7.4-7.8. (Xinhua/Liu Yu)
  • Actors perform royal dance at the Gyeongbok Palace in Seoul, Sept. 27, 2011. A ceremony commemorating the 38th South Korea Sightseeing Day was held in Gyeongbok Palace on Tuesday. (Xinhua/He Lulu)
Hot Forum Discussion