Steel prices in China may recover later in October

Domestic steel prices may decline further in October, or even spread across regions for a while before they have a chance of recovery, Wang Jianhua, chief analyst at Mysteel, shared on September 30 in his October market review, explaining that the recovery could begin. if Chinese steel mills are forced to cut production in response to price declines since early September.

On the demand side, the pace of implementation of many construction projects in North and Northwest China could accelerate in October, while consumption by auto makers, household appliances and equipment will remain steady, Wang predicted.

Consumption for the whole month in October may seem slower due to fewer working days as a national holiday is celebrated across the country from October 1-8, he noted, adding that steel stocks could be reduced by 500,000-1 million tons for the entire month ...

At the same time, the supply of steel is likely to decline, albeit moderately, by about 3 million tonnes of finished steel. The slippage will be the result of lower production, higher exports and lower imports, Wang predicted, although imported billets in previous months could lead to higher rates of roll handling.

Many domestic blast furnaces may be doing maintenance next month either due to large steel inventories at the plant or due to production cuts in response to restrictions imposed by local authorities to control pollution, Wang said, and from September 27, electric arc production ... Steel mills (EAF) in the Mysteel study reported losses on average of 14 yuan per tonne ($ 2.1 per tonne), while EAF plants in southern China reported even more significant losses at an average of 129 yuan per tonne, added is he.

However, it is worth noting that steel stocks, especially rebar, are still much higher than a year ago, and due to the long holidays, stocks may increase during this period. This, in turn, could put pressure on prices soon after the holiday, especially in regions such as Northeast China or cities such as Beijing, Nanchang in Jiangxi and Nanjing in Jiangsu in East China, as well as Chengdu in Sichuan and Chongqing in Southwest China, according to Mysteel's monitoring.

In September, the apparent consumption of crude steel in China was estimated at 95 million tons, slightly lower than 96.7 million tons in August, while the daily consumption this month was higher than in August due to a one-day difference. Consequently, the total volume was still about 20% higher than last year, which disproved the opinion of some market participants that the demand was