Steel Prices in China Plunge: What Does This Mean for the Global Market?

China: Finished Steel prices in China took a downward turn in April due to weaker-than-anticipated demand from downstream users, coupled with high Steel production rates. Furthermore, China's average daily crude Steel output saw a 2.2 percent increase in the January-April period compared to the previous three months (January-March).

The real estate industry's ongoing underperformance has negatively affected the demand for Steel, while growth in demand from the manufacturing and infrastructure sectors has also slowed. In response, Steelmakers are fully analyzing the supply and demand situation and taking active measures to ensure the Steel market continues to operate smoothly.

In the given period, average imported iron ore prices rose by 30.9 percent compared to December last year, while finished Steel prices declined by 1.85 percent. This sharp increase in imported iron ore prices had an evident negative impact on the profits of Steel enterprises. As we enter May, raw material prices have begun to decline more rapidly, which has weakened the support for finished Steel.

As of May 10th, domestic inventories of the top five finished Steel products in 21 major Chinese cities declined by 1.8 percent compared to April 30th. This decrease may alleviate the downward pressure on Steel prices, leading experts to believe that Steel prices in China will stabilize and cease their downward trend for the month of May.