FOCUS: Optimism blooms in Chinese steel market on surprise stability

Stabilizing prices this month have lifted the gloom from China’s steel sector, resulting in the emergence of optimism for the market after the Chinese New Year.

Toward the end of 2018, most market participants had been pessimistic about Chinese steel prices, particularly those for flat steel, with the key automotive industry experiencing its first sales decline since the 1990s last year. “Market participants have become more optimistic about prices because demand has been better than expected. This has kept prices stable,” a trader in Shanghai said. Hot-rolled coil prices in the eastern Chinese city were at 3,720-3,730 yuan ($548-549) per tonne on Thursday January 24, up 70 yuan per tonne from 3,650-3,660 yuan per tonne on January 2 when trading resumed after the New Year break. Although car sales fell 2.8% to 28.1 million units last year, “HRC demand has been bolstered by other downstream industries, such as infrastructure development,” the trader said. China’s National Development & Reform Commission (NDRC) has approved infrastructure projects involving investments totaling more than 860 billion yuan since December, which appears to have stimulated growth...

Published

Jessica Zong

Miranda Song

January 25, 2019

08:40 GMT

Shanghai