In March, the sub-index for new steel orders for both domestic sales and exports reversed up 5.8 basis points on month to 38.5, but the worsening COVID-19 situation elsewhere in the world had dampened the global demand for steel, and the sub-index for China’s steel exports orders slipped further by 15.2 basis points to 27.3, according to the CSLPC statistics.
Better demand and the transportation resumption had accelerated the circulation of steel products nationwide, and as of mid-March, the inventories of five major finished steel products held by traders in China’s 20 sampled cities decreased 1% from early March to about 20 million tonnes, and the finished steel stocks at the member steel mills of the China Iron and Steel Association (CISA) also declined 7.4% to 19.8 million tonnes over the period, CSLPC noted, partly quoting the CISA data.
At the same time, the sub-index for steel production reversed up 8 basis points on month to 39.3 for March, as Chinese steel mills ramped up production on the improvement in demand and logistics, more employees returning to work and the completion of maintenance, the committee noted.
The Shanghai rebar price index, as a result, also rebounded from Yuan 3,441/tonne ($484.7/t) on March 2 to Yuan 3,518/t as of March 26 and even high a new high of Yuan 3,562/t on March 18 since the Chinese New Year holiday, CSLPC cited data from the other research institutions.
“For the second quarter, the demand will further pick up, and steel output will grow further, which may lead to slightly higher supply, and steel prices will be rangebound most of the time instead of substantial gains,” it predicted.
Steel demand from the sectors such as infrastructure construction such as ultra-high voltage transmission projects, and 5G network construction may all grow substantially in the second quarter.
China’s steel output, thus, may remain the same as that for 2019, according to CSLPC’s projection.
The committee, however, warned that the explosive growth in the COVID-19 confirmed cases has and will hurt both steel demand and supply worldwide, which will impose more pressure on the global steel market and further dampen China’s steel exports for the rest of 2020.
Written by Anna Wu, firstname.lastname@example.org
Edited by Hongmei Li, email@example.com