Securities Times quoted China Iron & Steel Association said China''s steel industry is still faced with tough conditions combining high cost, low price and massive losses.
The paper quoted a latest report by CISA, saying the steel market will continue running at a low level with small vibration in future, given a stream of factors incl. diminishing overseas demand, tougher export and home surplus, despite that the domestic demand has increased with implementation of the national stimulus policies.
The domestic steel prices were going toward stabilizing as demand gradually revived and stocks descended in April when the demand is boosting & growth sustaining measures phased in. By end of April the nation''s composite steel price index went to 95.56 down by 2.03 or 2.08%MoM the percent down 3.8 points than of the previous month.
The association attributed the stabilizing trend to rise in demand, esp. from the real estate and automotive sectors, which pulled down the social inventory and beefed up market confidence. Another factor supporting the steel price is slower price dips for fuel and the materials.
But the association kept not optimistic on the future market, citing a big crude steel output so far. In January to April China produced a total of 170.8565 million tonnes crude steel, a daily equivalent of 1.4238 million tonnes higher than last year''s figure of 1.3675 million tonnes. This will equal to an annualized yield of 520 million tonnes. The overcapacity problem is expected to linger on further given new installations in Bayuquan, Caofeidian and other projects.
In the meantime, the nation''s export rebate policy effective as of April 1st has not rescued steel product exports from shrinking. And the net imports will intensify domestic oversupply.
The association called China''s steel industry to speed up restructuring and upgrading, check total production, enhance management and sharpen competitiveness to toil over the toughness.