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Chinese steel production more expensive

5 September 2016

Considering the situation on the steel market in August compared to July, overall, little change is observed. However, there is one important exception. The cost of steel production of China increased markedly. Their price increased by 15−25 USD per ton. In the end, Asian and middle Eastern market is experiencing an unusual situation. Hire Chinese steelmakers is not the cheapest. Took advantage of the Russian and Ukrainian producers. Some benefit received by the Indian and Iranian suppliers.

If we consider the Chinese sector of stainless steel, then in July, the export volume amounted to 127 thousand tons of rolled products. For the six-month period, the exported volume reached 892 thousand tons. This was reported in the report of the Association of producers of special steels in China. The leading Chinese exporter Tisco set in July foreign consumers 51000 tons of stainless steel. For the six-month period amounted to 420 000 tonnes. In the annual equivalent delivery in July fell by 5.47%. In General, according to the Association six months of this year, Chinese steelmakers produced 11.73 million tons of stainless steel. In 2015 the world production of stainless steel amounted to 41.5 million tons. This year the figure will increase to 42.3 million tons, according to analysts. Apparent consumption of stainless steel in China in 2015 increased by 1.4%.

Aside from the Chinese steel sector for the majority of suppliers the situation in the market develops adversely. The August apparent demand for steel products was habitually low under the influence of seasonal factors. However, the prospects for autumn are not too encouraging. The global political and economic factors affect the consumption. Accordingly, the cost of production is not going to rise.

The increase in value of the Chinese car recalls rise spring 2016. In March, steel prices have shot up under the influence of expectations on the market. On the other hand, the events from five months ago is not repeated. Manufacturers of other countries, a weak response to the growth in the cost of Chinese products. There has been a waiver of building costs, but there is a stimulation of sales. At the global level there is a lack of markets. The reasons for this are different. Someone under the influence of the financial problems reduces the consumption of steel products. Others are engaged in the erection of barriers defending against foreign suppliers.

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