According to the latest data from the China Steel Association, the country's daily crude steel output in late March was estimated at 2.0719 million tons, marking a 0.4% increase from the previous month. This is slightly below the peak of 2.0846 million tons recorded in early March but still reflects a strong production level. Despite this, the pace of growth has slowed, indicating that the market may be reaching a plateau.
Hebei Province’s environmental regulations introduced in late March have not significantly impacted steel production so far. One reason is the gradual recovery of downstream demand, which has encouraged steel mills to maintain their output levels. Additionally, steel companies are operating on very thin margins, and unless they face sustained losses, they are unlikely to cut back significantly. This suggests that while production won’t rise further, it also won’t drop sharply in the near term.
In March, China’s manufacturing PMI stood at 50.9%, continuing its expansion for the sixth consecutive month. However, the finished goods inventory index shifted from contraction to expansion, signaling a potential buildup of unsold stock. Meanwhile, industrial producer prices fell by 1.9% year-on-year, with the rate of decline widening. These trends suggest weak demand, especially as steel demand from downstream sectors failed to meet expectations. With continued high steel production, inventories at major steel enterprises and the steel society reached new highs. By the end of March, inventories at key steel companies had risen to 137.56 million tons, up by 1.0559 million tons from the end of February.
Raw material prices, including iron ore and coke, remain low, further pressuring steel prices. As of April 8th, the price of imported iron ore was 976.4 yuan per ton, down 7.74% compared to the same period last month. The comprehensive transaction price of steel was 3,924.9 yuan per ton, a decrease of 2.41% over the same period. Iron ore port stocks also increased last week, with 67.96 million tons stored across 30 major ports—an increase of 40,000 tons from the previous week.
Despite the high supply pressure, domestic steel inventories have been declining in April, suggesting some improvement in downstream demand. According to mysteel.net, the social inventory of five major steel products nationwide dropped to 21.6256 million tons as of April 5, a 1.42% decrease from the previous week—marking the third consecutive week of declines. At the same time, the CPI rose 2.1% year-on-year in March, but inflationary pressures remain manageable. The central bank is expected to keep monetary policy relatively loose, ensuring ample liquidity in the interbank market.
Overall, while demand in the steel market is gradually improving, supply remains robust, keeping prices under pressure. In the short term, steel prices are likely to consolidate, with limited potential for a significant rebound.Temprature Measurement,Temperature Meter,Digital Temperature Meter,Temperature Humidity Meter
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