China Steel Corp (中鋼), the nation’s largest steelmaker, yesterday said it would reduce domestic steel prices for deliveries next month by 5.61 percent, given lower market demand and falling iron ore prices.
It is the third consecutive month that China Steel has cut domestic steel prices, after a reduction of 2.1 percent last month and 2.23 percent for this month, company data showed.
The steelmaker said that growing concern about a global recession, soaring inflation and the summer vacation in the West are adding to already-sluggish steel demand over the past few months, which was caused by Russia’s invasion of Ukraine, China’s COVID-19 lockdown restrictions and the monsoon season in Southeast Asia.
Photo courtesy of China Steel Corp
Although Beijing is gradually relaxing lockdown restrictions, the Chinese economy has not rebounded as fast as expected, the company said in a statement.
Chinese manufacturers have become more conservative about demand as consumers cut spending amid fears of a recession, it said.
“Sluggish demand and inventory adjustments — amid panic buying by companies earlier this year at the onset of the Russia-Ukraine war — constitute a dual downward pressure on steel prices,” it said.
Raw material prices are also on the downtrend, China Steel said, with the price of iron ore dropping to US$105 per tonne and the price of Australian coking coal declining to US$245 per tonne.
Pushed downward by sluggish demand and lower raw material prices, the prices of hot rolled steel products made in Europe, the US and Asia have tumbled to the lowest levels in the past 12 months, China Steel said.
Global counterparts, such as China’s Baowu Steel Group Croup Ltd (寶武鋼鐵) and Angang Steel Co (鞍山鋼鐵), as well as Formosa Ha Tinh Steel Corp (台塑河靜鋼廠) in Vietnam, have also trimmed steel prices, it said.
China Steel still expects global steel prices to bottom out later this year, as many steelmakers, such as Nippon Steel Corp and ArcelorMittal SA, have begun cutting supply, it said.
The company cut the prices of hot-rolled sheets, hot-rolled coils, cold-rolled coils and hot-dipped zinc-galvanized coils used for construction by NT$2,000 each per tonne, and the price of electro-galvanized coils by NT$1,500 per tonne.
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