Global Steel Prices Move up amid Bullish Chinese Sentiments

Production cut and unavailability of ready stocks of flat products are the two factors which are driving prices upward in Chinese domestic market.

The global steel industry which is dealing with falling prices since last one year seems to edge back in to growth with the start of year 2016.

Flat product prices in Chinese market have moved up by USD 15-20/MT as the local mills there are reluctant to lower their export offers amid bullish sentiments in domestic steel market.

The domestic steel prices in China are moving upwards and market participants have become more interested in selling in local market. However this price surge is driven more by positive sentiments rather than any upturn in demand.

As per market sources, many small steel mills are defaulting in timely delivery of orders due to recent increment in raw material, iron ore prices. There are no ready stocks available for flat products and buyers are stocking up material available from large players.

Also as a price control measure, steel output in China has been aggressively cut since latter half of 2015 and further cuts are also probable.

Following China, offers from Japan/Korea and CIS countries have also moved up in the range of USD 5-10/MT and USD 20-30/MT respectively. Chinese flat steel export offers for countries like Saudi Arabia and Vietnam have also moved up.

After the Indian government announced MIP on 5 Feb’16, Indian buyers are not opting for steel imports from any country as import below fixed MIP is not allowed in to India.

However, as per market analysis, though currently prices are increasing amid bullish market sentiments, this price upsurge is sustainable only if there is any improvement in real demand for steel.

Global Flat Steel Prices as on 25 Feb’15

*CNF Prices are from China
Source: SteelMint Research