Turkey steel import market reduced a lot, mainly due to steel products requirements decrease. According to the data, a steel manufacturer in Turkey imported heavy scrap (80:20, mixed No 1,2) from US. The price is 267 USD/TON(CFR). The price is 262-263 USD/TON from Europe. It has reduced more than 30 dollars per ton compared to previous period, it’s not a good news for the steel scrap supplier.

US importers are seeking chances from domestic market, steel scrap supplier reduce the price.

Due to the import steel products reduced, US importers are seeking chances from domestic market. However, as steel products supply capacity increased, US domestic steel scrap market going weak slightly in April, steel scrap price reduced 10-30 dollars / ton, steel scrap supplier could not sell as expected. East coast district steel scrap market reduced more than the other area. Ohio steel scrap price reduce 35-40 USD/Ton, inland areas reduce small. Michigan steel scrap prices reduce 25 US USD/Ton.

In March, US central eastern steel plate manufacturers offer the steel scrap at 320-325 USD/Ton. Although it has reduced 10-30 USD/Ton, the price is still attractive compared to international price.

East Asia bulk heavy steel scrap imported market continued to shrunk

East Asia bulk heavy steel scrap import market continued to shrunk, bulk No 1, 2 mixed heavy scrap (80:20), from previous 315-323 USD/Ton (CFR) reduced to 295-300 USD/Ton (CFR). Vietnam steel import market also reduced, bulk heavy steel scrap quoted price is 304 USD/Ton, buyers give a price at 290 USD/Ton (CFR).

Japan Steel Scrap Market Reduced

Japan imported market become weak for steel scrap, East countries imported No.2 heavy steel scrap at price of 28000 Yen/Ton(252 USD/Ton , declined 1000-1500 Yen/Ton compared to the previous period. Because of China Spring Festival, there is no inquiry from China mainland and Taiwan district.

Domestic steel price decline for all the steel products

The National policies has remove all substandard steel, and  reduced production capacity with more effort. The steel price experienced shot-term increase, then starting to reduce gradually.

By the 11th of April, the steel product steel billet offered 2900 CNY from Hebei Tangshan district. Compared to 19th March of 3300 CNY,the price has reduced more than 10%.

Among all the steel products, the steel billet price wasn’t the largest decline. Economic Journalist by 21 century report that the  hot rolled steel coil and iron ore price has reduced about 20% in last 3 weeks.

The situation is totally different from the last year at the same time. By the secondary-half  of April in 2016, steel billet price offered 2500 CNY/TON. Compared to 1500 CNY of the February has increased about 70%.

Reason for steel price decline

By the Journalist from 21st Century Economic Report, the emergence of the above situation has related with manufacturer’s production accelerated. Steel exports reduced a lot, and worldwide shows oversupply condition. On 11th of April, Hebei Tangshan district’s blast furnace operating rate more than 90%. This shows that the local steel products producing is still fast.

Data showed that our domestic steel production capacity is 2.823 million tons from January to February of this year. It increased 4.1% than the same time of last year. Export steel reduced 25.7% compared to last year at the same time.

Steel price declined more than 10% to 20% in last three weeks

According to the government report of 2017, this year have to reduce 50 million tons steel production capacity, which is 5 million tons more than last year of 45 million tons. Additionally, by the July of this year, China will removed all the substandard steel, which means duty of reducing capacity is heavier than 2016.

But big increase for the steel price brought by reducing capacity seems no longer continued. About 21th of April, 2016, steel price of Hebei Tangshan and the whole nation steel market reached to the top point since one year ago, but steel price was continued to reduce from March this year.

For example in 11th of April, besides Hebei Tangshan district steel billet price reduced more than 10% compared to March 19, steel bars in HRB 400 / ASTM A615 GR60, price also reduced more than 10% compared to March 17. As the hot rolled steel coil and PB powder(a kind of iron ore), their price offered 3180 CNY, 565 CNY separately on 11th, April, reduced more than 20% compared to the top price of 3830 CNY on February 28th, compared top price 715 CNY/TON on 22th February, reduced more than 20%.

Policy to reduce substandard steel may cause steel plates, steel pipes, hot rolled steel coil and other steel products’ price increase.

As the policy plan is to reduce production capacity million tons of substandard steel, it will cause the steel shortage probability, price will increase correspondingly, but at present the case is not considered like this.

Analyst Chen Kexin considered that the contradiction may related with the progress of reducing capacity. And more reasons exist at the same time.

Manufacturers speed up producing caused over capacity

Why the price of steel turned down ward? Fundamentally speaking, the product is still oversupplied.

Many factors related with the steel price, there shall be a significant fluctuating on the steel price this year. ” The most important factor is the progress rate of reducing production capacity, and determination of cutting out the substandard steel product.” Chen Kexin said.

Steel trend 2017 affected from the price and the end user

The current steel products of steel plate price, steel pipe price, steel profile price reached to a top point in 2013 between 2017. The requirements from end user became less, and it had a certain impact on the steel products market transactions, so the steel trend 2017 is not going stable in the start of 2017.

The steel market 2017 status of supply and demand

In view of overall steel supply and demand status at 2017 steel market, the crude steel production in China increased moderately in January and February. Real estate and infrastructure projects investment increased better than market expected. It proved the current domestic steel market demand was at a high level. The domestic supply and demand of steel market continued to improve and good for the steel price trend.

The data showed that fixed assets rose 8.9% in January and February, up 0.8% from last year, reached new high since July. The crude steel and steel production were 128.77 million tons and 166.55 million tons respectively, and the growth were 5.8% and 4.1% year on year.

The analysis of 2017 steel market and trend

The current trend of 2017 China steel market was unclear. On the one hand, the cutting capacity policy and environment protection continued to enhanced. Investment in basic construction projects accelerated. The market requirements of amount for steel products increased, such as steel plate, general steel rebar, steel pipe fittings and so on, so the steel inventory continued to reduce, to support current high steel price and high profit of steel manufacturers. On the other hand, the central bank raised the interest rates, the monetary policy was in tighten status. The real estate market face with the cold status.

So the steel trend 2017 starts was in the condition of weak. It is estimated that China steel price 2017 maybe at high point in short term.

Chinese Hot rolled steel coil price:

Asian hot rolled steel coil contract price reduced to the lowest point. Chinese general carbon steel coil export price offers 475-480 dollars per ton(FOB). Korean buyers hope to buy at a low price, Southeast Asia still give a lower price. Cold rolled steel coil raw materials exported to Vietnam offers 480-490 dollars per ton(CFR). While, India and Taiwan(China) offers 500-515 dollars per ton(CFR).

Chinese Reinforced Steel price:

Asian reinforced steel market keep going steady, most of the buyers keep the attitude of waiting. Chinese mainly exported price is about 480 dollars per ton (FOB, real weight), Turkey steel materials to Southeast Asia offers price at 445 dollars per ton(CFR).

Asia Steel Billet price:

Southeast Asia steel billet import market is quietly, buyers considered that price will continues to reduce. So they will not buy now. Chinese mainly price offers at 440-450 dollars per ton(CFR), Vietnam steel billet delivery to Philippine offers 430 dollars per ton(CFR).

Chinese Steel wire price:

Asian steel wire contract price is going weak, Chinese steel billets offers at 470-480 dollars per ton(FOB), due to the domestic price rise up slightly, a few of traders offers increased slightly, price at 475-485 dollars per ton (CFR) to Vietnam, but there is a big difference than the buyer’s target price, so orders are less. Philippine import market still very quietly, even no request. Buyers from South America and Africa have some requests.

China Steel Association: China’s future 100 years will be the largest country for the manufacturing steel products; China’s steel business profit margins are still low; the global steel industry should not blame China for overcapacity. Global iron ore supply capacity is estimated at 1.52 billion tons this year, which for the last year is 1.06 billion tons.

Raw material Steel Billet: On 31th Tangshan billet offered 3130 CNY temporary stably, other markets is going stable. Today, the sales transactions is less. Billet transaction is still weak, steel billet inventory offers 3180 CNY including the tax, but transactions also small.

China Domestic iron ore price reduced but stable

On 31th China domestic mining market going weak, different with the International iron ore price, China price reduced but going stable.

Yesterday China domestic iron ore price reduced 1.15 US dollars, it is a big attack for the buyers and sellers. For the Chinese steel manufacturers, the current price of materials has declined. Compared to the previous month the profits shrunk. Therefore, China steel manufacturers have to reduce the steel price immediately. As inventory is still big at the port, for the factories have nothing to fear.

Mining Companies side, hoping to enhance the price. But affected much by the reduction from the steel factories, even reduced 14 dollars in a few days. The mining companies have to reduce the prices accordingly.

Trading companies fearing that the factory price is higher than the stock price, so they only purchase a few material from the contract with factory. Orders increased slightly, we could assume that the traders buy materials in the bottom of the market, but the market could not give a good support, traders still need to wait for good opportunity. Recently, due to the general downturn of the steel market, foreign mine sells well because of the low price. China domestic iron ore market will keep stable and week in short-term.

International iron ore price keeps stable and cold rolled steel coil price expected to increase

On 31th, imported ore prices and sales keeps stable.

Steel stock

South China Building Materials: Reinforced steel rebar is continuously strong, gives a certain support for the steel inventory.

Central China cold rolled steel coil: Recently price is reduced a lot, traders losses too much. In addition, because China steel manufacturers didn’t give the discount bonus as promised,  some steel trading company have to stop orders with factories or cancel the future orders. Cold rolled steel coil Inventory will be reduced gradually. From the current condition, the market is going into a gambling game, it was considered that the traders will try to increase the market price after the holidays. In a word, the market price of cold rolled steel coil is expected to increase.

Steel Demand is not Growing Accordingly, though steel products manufacturers’ inventory increased

In fact, steel demand is not growing so much accordingly. The steel profile, steel plate export, steel pipe export fell a lot more than 20% than the same time last year. Since August 2016, Steel pipes, plates, profiles export have already declined for the 9 consecutive month for single month. At the same time, these steel products manufacturers’ inventory increased, 12.76 million tons for last year, and 14.43 million by the end of March this year.

Iron and steel production increased with iron and steel price

Iron ore inventory at port continue to increase since December 2016. The data shows the port inventory reached 133.6 million, a new record. The domestic iron and steel production increased along with iron and steel price rising. From January and March, the domestic iron and steel production was 2.98 billion tons, rose by 15.9% year on year.

From the beginning of 2017, the steel products manufacturers profit has been maintained at a high level, profit of steel plate manufacturer, steel line pipe manufacturer and steel profile manufacturer average is about 1000 CNY / ton. The steel demand still keep relatively stable, the infrastructure will also need kinds of steel products, such as steel plate, steel pipe fitting, steel bar ect.

Steel products prices will fluctuate in a reasonable range

Due to reducing capacity policy, lots of steel product manufacturers like steel plate manufacturer, steel line pipe manufacturer, steel profile manufacturer shut down. But it will not affect the steel products supply, such as carbon steel plate, API steel plate, steel pipe fittings ect. Iron and steel manufacturers with long production line / high technology and the electric furnace can meet market demand by increasing production. Wu Jingjing, the senior analysis, remind that lots of steel products manufacturers showed high enthusiasm for manufacturing more products, and it is a hard trend to increase the production, so steel product price will fluctuate in a reasonable range.

Steel plate price and related steel products price reduced from March, 2016, and it came slowly in April. Domestic steel PMI (Purchase Management Index) index dropped 0.8% to 50.6% in March. This was the fall after PMI rose for two months, but still above the 50% line. Also it caused the steel products like steel profiles price, steel plate price, steel pipe price reduced accordingly.

In the main sub index, the steel products production index had three continuous growth to a top point in nearly ten months. The new orders index for the steel products fell back from a high point, and new export orders API 5L steel pipe fell to the lowest point in the recent years. The finished steel products storage returned to the line more than 50% after five months. All these index showed that the steel plate manufacturers produced more actively, but the orders growth is slowing down. The export orders for steel products decreased significantly, and the steel products steel profiles and steel plate inventory start to overstock.

Steel plate manufacturers speed up the steel production

At present, The steel plate manufacturers speed up the production. The production index continued rising to 52.0%, up 1.6% from February, reached the top price since June 2016 for the steel plate products. For the steel pipe manufacturers, they also slow down the production for the API 5L Steel Plate and API 5L Line Pipe. With the increase of steel prices, most of steel plate manufacturers was making money. So they had strong desire to increase the production for the steel profiles, steel reinforced bar, and steel plate. Based on the completion of the task to reduce 65 million tons steel products last year, China will reduce more 50 million tons. As the illegal steel manufacturers and fake steel manufacturers quit the market, it would provide space for the good steel manufacturers to increase the production.

Steel plate manufacturers speed up the steel production

Iron Ore and steel raw material price still remained high. The purchase price index from steel plate manufacturers for the Iron Ore and steel raw material have rose to 62.6%, reached to top point in recent four months. It showed steel raw material price still keep a tough status, specific steel raw material was different. The imported iron ore price fell down a lot, specific steel raw material like domestic iron ore, steel billet, steel scrap price waved slightly, however coke price continued to rise.

With the adjustment of domestic steel price, the profit shrunk and became less for the steel products, steel profiles, steel plate and steel pipe etc. So the steel plate manufacturers was not enthusiasm to purchase more raw material, the order quantity had declined than earlier time.

China cut steel capacity made a good effect for the steel products steel plate price

Due to the acceleration of cutting capacity for the steel products like steel plate, the contradiction between supply and demand had accumulated. However, Chinese economy turned to be stable and warmer, China steel production cuts policy continued to enhance. It still make a strong effect on steel products price. Domestic steel products price have limited space to reduce in April.

China Steel manufacturers will produce steel 834 tons

The China Metallurgical and Industry Planning and Research Institute believes demand for steel products will reach 720 million tons next year, up 1.4% from this year. At the same time, the steel industry especially the steel plate manufacturers will produce 834 million tons of crude steel, an increase of 1.71% from 2014.