(HSV VIETNAM GROUP) – China produced 71.4 million tons of cast iron and 82.94 million tons of crude steel in July, down 8% and 9% respectively over the same period last year.
Chinese steel prices have fallen since the end of July, due to high output, reduced steel demand, as well as sell-offs by traders to clear old-standard rebar inventories. China has ordered rebar under the old standard not to be produced and sold after September 25.
World crude steel production for the 71 countries reporting to the World Steel Association (worldsteel) was 152.8 million tons in July 2024, down 4.7% compared to July 2023.
China's steel output falls while the outlook looks bleak
China's crude iron and steel output both fell in July due to weak end-user demand. Output is expected to fall further in August as steel prices hit a seven-year low, but output is likely to recover in early September.
Sources said the market outlook for domestic steel demand remains gloomy, which will continue to put pressure on the steel market in the second half of 2024.
Output slows down
China produced 71.4 million tons of cast iron and 82.94 million tons of crude steel in July, down 8% and 9% respectively over the same period last year.
Chinese steel prices have been falling since late July, due to high output, falling steel demand, as well as panic sales by traders to clear old-standard rebar inventories.
China has ordered that rebar according to the old standard cannot be produced and sold after September 25.
On August 15, domestic rebar and hot-rolled steel prices were assessed to fall to 3,060 yuan/ton ($427/ton) and 3,100 yuan/ton, down 450 yuan/ton and 600 yuan/ton from mid-July and at their lowest levels since January 2017 and June 2017.
The downstream sector is gloomy
China's new home sales in the first 7 months of the year decreased by 18.6% over the same period last year.
Along with that, the start of new home construction in China, the main driving force driving steel demand in China, decreased by 23.2% over the same period last year in the first 7 months of the year.
Some market sources said Beijing does not intend to introduce strong stimulus measures to boost real estate, infrastructure or consumer spending, suggesting that domestic steel demand in the second half of the year could be lower than the first half.
HRC
US, EU move sideways; Asia decreased
The US hot-rolled coil market stabilized in mid-August as many buyers still relied on contracts rather than venturing into the spot market. US HRC was at $680/ton ex-works, unchanged from August 15.
Many buyers are still standing outside the market with no immediate intention of restocking because they see inventory and supply at abundant levels.
In Europe, the HRC market is also stable, although prices continue to be under downward pressure due to weakening fundamentals.
Northwest European HRC price was at €605/ton ex-works Ruhr on August 16, stable compared to the previous session.
Sources noted that due to high inventories, orders will remain weak in the following months, making it difficult for factories to sell raw materials.
A combination of macroeconomic and regulatory factors, such as quotas, safeguard duties and longer delivery times, are weighing on demand for imported HRC.
HRC markets in Asia fell in the week ended August 16 due to falling Chinese futures prices and pessimism in the spot market.
Prices for HRC SS400 3mm thick fell $31/ton from last week to $449/ton FOB China on August 16. HRC of the same grade fell $33/ton to $453/ton CFR Southeast Asia over the same period.
Market participants said persistently weak demand in both domestic and overseas markets, especially amid more anti-dumping investigations into Chinese materials, has sent HRC prices to a four-year low.
Long steel products
Rebar market holds steady
Türkiye's rebar export market stabilized as market participants monitored the supply and demand situation in Asia-Pacific to assess the short-term market outlook, while mills kept their offers unchanged.
Türkiye's export rebar price was at $570/tonne FOB on August 19, stable compared to the previous session.
The rebar market in the United States is also stable with increased trading activity.
Southeast US rebar prices were at $745-755/ton on August 16, unchanged from the previous week, while US Midwest rebar prices were at $735-745/ton, down from $740-760/ton on August 9.
In Asia, the steel billet and rebar market was largely stable as exporters' offers were stable despite rising Chinese rebar futures prices.
5SP 130 mm billet price was at $456/ton CFR Southeast Asia on August 19, stable compared to the previous session, and China's imported 3SP 150 mm spot rebar was at $361/ton CFR China, up $10/ton from the previous session.
Steel plate
In the United States, the steel plate market is stable, demand is weak, buyers only buy when necessary.
The European steel plate market is stable. Some factories pushed up their offering prices even though business was quiet due to summer holidays in most European countries.
Domestic heavy steel plate prices in Northwest Europe were at €720/tonne ($797) on August 16, unchanged from the previous week.
In Asia, steel plate markets weakened as China futures prices sluggish amid continued weak demand and a bearish price outlook.
SS400 steel plate price 12-20 mm thick was at $470/ton FOB China on August 14, down $17/ton from last week. Steel plates of the same type 12-25 mm thick were at $483/ton CFR Korea, down $17/ton compared to last week.
Scrap steel
The Asian scrap market saw India's imported container scrap fall slightly as buyers stayed on the sidelines amid high finished steel inventories.
The price of imported containerized scrap was at $390/ton CFR Nhava Sheva on August 16, down $5 from the previous session and down $7.50/ton from the previous week.
Elsewhere in Asia, Japan's FOB H2 scrap prices fell amid yen volatility and weak demand in the week ended August 14.
H2 scrap price fell 500 yen/ton at 47,000 yen/ton ($319/ton) FOB Tokyo Bay, August 14, down $3/ton from last week.
Taiwan containerized scrap price 1/2 80:20 was at $337/ton CFR, August 16, down $6/ton compared to last week.
Amid falling Asian scrap prices, Türkiye's 1/2 (80:20) premium heavy scrap import price was at $370.25/ton CFR on August 16, down $3.75/ton from the previous day.
The Asian metallurgical coal market decreased slightly in mid-August, demand remained weak.
Premium coking coal prices decreased $0.5/ton from the previous day at $204.5/ton FOB Australia August 16; CFR China premium coking coal price remains at $215/ton.
Demand remains low compared to market availability, with expectations for a market recovery by mid-September when Indian steel prices are expected to improve.
The buying interest of Indian steel and coking coal producers is still quite lukewarm with most still maintaining a wait-and-see mentality, expecting prices to continue to decline in the context of a gloomy steel and coking coal market.
Chinese market sentiment is weak with buyers on the sidelines expecting steel and coking coal prices to continue falling.
The Asian seaborne iron ore market trended lower in mid-August as downstream steel demand remained under pressure.
62% Fe iron ore price was at $91.90/dry ton CFR North China on August 16, down 85 cents/ton from the previous session.
Steel mills face weak downstream demand, causing continued pressure on raw materials.
Ha Diem HSV