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RONSCO Weekly | May 9th Steel Market Recap: China’s steel prices further drop

Date:2023-05-09View:208Tags:Oil Country Tubular Goods,Pre Galvanized Steel Pipe,Seamless Hydraulic Tubing

Hello everyone! Welcome to RONSCO Weekly! This article is to providing the latest Chinese steel prices and market trends every week. If you are interested in our information and article, please focus on our website to stay up to date with future updates.

 

The Chinese market has seen a decrease in activity this week, resulting in lower steel prices. First of all, China's manufacturing sector experienced a significant decline in April, with the PMI dropping to 49.2%, a decrease of 2.7% points from the previous month. This indicates that the demand for steel in this sector is currently low.

 

And guess what? On the supply side, Steel mills are reducing their output due to decreasing prices and reduced profits. However,he property market is still weak and there is little potential for growth in infrastructure needs.

 

Now, lets take a look at the production and consumption aspects in more detail. As the five-day holiday further playing its part in driving demand down, China's steel production decreased by 150 thousand tons this week, while the demand for steel decreased by 800 thousand tons.

 

Accordingly, the amount of steel stored in inventory increased by 170 thousand tons, showing that there is still an excess of steel in China's steel market. It appears that the Federal Reserve's recent increase of 25 basis points in May may signal the end of further rate hikes. However, It is unlikely that China will implement more effective stimulus measures in the near future, so steel prices are likely to decrease in the short term. Interest rates will remain high, which will continue to put downward pressure on commodity prices in 2023.

 

Do you believe that Chinese steel prices will decrease further? If you liked this article, please remember to subscribe to our website and we will update continuously in next week. See you!