Metallurgists in China contribute to the fall in steel prices

The falling demand for steel creates global problems in the process of forming the value of steel. At the same time, the critical situation in China goes beyond government control, since many of the enterprises independently increase supplies and reduce prices, which contributes to an increase in exports.

Data provided by the China Metallurgical Association, CISA, reported a prolonged 12-week drop in steel prices. At the same time, the real estate market, construction sector and tourism in the country continues to develop, but this is happening slowly. The price of steel in the country fell 13 percent lower than the price that was determined last year.

According to data released by CISA, the average price of steel products is below $ 5,220 per ton, which is 28 percent lower than the average price that was announced in 2012.
Analysts say the market glut during a slowdown in demand is the main reason for the fall in the steel market. Chinese steel mills continue to flood the steel market, increasing surplus as demand creeps down, only resulting in lower margins for steel mills in China.

According to a poll published in the Wall Street Journal, exports of steel products in September this year amounted to 7.2 billion tons, up 4.5 percent from the highest exports in the past. The flooding of the global market with steel products at a lower price than other manufacturers can offer is contributing to the fall in steel prices and lower profits at the global level.