China’s steel prices are expected to stay low, claims MySteel, as the country enters the hottest period of the year.
The Myspic steel price index, which is compiled by MySteel, declined 0.1% to 119.82 and Chinese steel prices are expected to stay low.
Daily crude steel output reached a record 2.3Mt in June, up by 37.6kt (1.65%) over May. Daily steel products output was up 4.65% to 3.2Mt.
According to the latest statistics from the China Iron and Steel Association (CISA) the average daily crude steel output of China’s major steelmakers was 1.8Mt between 1-10 July, up just over 2% from the previous 10 days.
CISA’s CSPI steel price index dropped to 92.99, its lowest level since July 2003. Prices will only rebound if demand from downstream sectors, such as automotive, shipbuilding and household appliances. Vehicle sales rose just over 5% year-on-year in June, up 3.27 percentage points over the same period in 2013, according to the China Association of Auto Manufacturers (CAAM).
Huge investment in the rail sector in China should boost steel demand and leading steelmaker Baosteel has announced a prices freeze for August with the exception of oriented electrical steel that will rise by 200 yuan/tonne.