China Iron and Steel Association (CISA) called for production controls at steel mills in response to a lacklustre steel market characterized by high output, cost and stocks yet low demand, prices and profits.
Significant fluctuations in the steel market are detrimental to the industry's orderly and healthy development, the CISA said.
The CISA data showed Chinese key steel mills held 19.53 million tonnes of finished steel stocks as of March 20, increasing 0.05% from ten days ago and 2.92% month on month.
By contrast, the price of Shanghai HRB 400 rebar (20 mm) stood at 3,500 yuan/t on March 28, down 100 yuan/t from a week earlier and 310 yuan/t on the month, while Shanghai hot-rolled coil (3.0 mm) decreased 100 yuan/t on the week to 3,850 yuan/t, also 180 yuan/t lower than the month-ago level, Sxcoal learned.
The CIAS ascribed the recent market downturn mainly to sluggish downstream demand, owing to the continued decline in the real estate market and a slowdown in infrastructure construction.
The key to achieving a balance between supply and demand lies in fully leveraging the vital role of steelmakers. The CISA urged steel companies to take proactive measures and adhere to a disciplined production approach to reduce production intensity.
It emphasized the need to reduce ineffective supply and pursue high-quality development. Leading enterprises are expected to take the lead in assuming responsibility, setting an example, and promoting the smooth operation and orderly development of the steel market.
In light of speculative buying and selling that amplifies market volatility, the CISA highlighted the importance of maintaining a rational approach and opposition to malicious competition. Steel firms are also urged to enhance risk awareness and effectively manage sales channels.
China's steel demand remains substantial, and the industry should improve its ability to adapt to the market, it said. Steelmakers are encouraged to quickly reduce inventories to achieve a supply-demand balance.
(Writing by Riley Liang Editing by Harry Huo)
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