As global steel prices face downward pressure from falling demand, the situation in China is making the problem worse, as overcapacity is prompting Chinese steel enterprises to cut their prices in order to boost exports.
Data from the China Iron & Steel Association (CISA) showed Monday that domestic steel prices have been falling for 12 straight weeks, with the Steel Composite Price Index down more than 13% compared since the end of last year, even as the nation’s construction activity and real-estate market are cooling significantly.
The average price for the range of steel products on offer has fallen to 3,212 CNY ($520) per metric ton for the first half of the year, down 28% from the average price in 2012, CISA data showed.
Chinese steel prices were flat for the day. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($136.77) and a low price of CNY 830.00 ($135.14) per dry metric ton. The price of Chinese HRC saw little movement at CNY 3,030 ($493.34) per metric ton. The price of Chinese coking coal continues hovering around CNY 1,390 ($226.32) per metric ton for the fifth day in a row.
The steel billet cash price remained essentially flat at $450.00 per metric ton on the LME. The steel billet 3-month price saw essentially no change on the LME for the fifth day in a row, remaining around $455.00 per metric ton.
The US HRC futures contract 3-month price saw little movement last Friday, closing out around $626.00 per short ton. The US HRC futures contract spot price remained essentially flat at $637.00 per short ton.