According to a report released by the China Iron and Steel Association (CISA), due to the imbalance between supply and demand in domestic finished steel market, it is thought that Chinese domestic finished steel prices are unlikely to indicate any significant increases in the coming period but will instead likely fluctuate within a limited range.
As indicated by the CISA, China has issued a series of fiscal policies to stabilize domestic economic growth, supporting real estate development, increasing investment in infrastructure and cutting interest rates. In the January-May period of the current year, investment in China’s domestic infrastructure totaled RMB 3.4992 trillion ($0.53 trillion), up 20 percent year on year. Meanwhile, China has continued with structural reforms and supply-side reforms, while also eliminating outdated and excess capacity, all of which has provided some support for finished steel prices.
However, with more antidumping investigations initiated against China, finished steel exports to other countries will likely decrease in the coming period. In addition, China’s average prices of coal and coke continued to increase in May this year amid the declining trend of finished steel prices, and this has squeezed the profitability of domestic steel enterprises. It is thought that domestic finished steel prices will likely fluctuate within a limited range in the coming period.