China’s steelmakers accelerate optimization of steel product mix

The steel industry is accelerating the optimization of its steel product mix, according to the China Iron and Steel Association (CISA).

According to CISA, this is in line with the adjustment and optimization of the national industrial structure.

In the first half of this year, the production of steel products, which are mainly used in construction, bridge and machine building, declined year-on-year. At the same time, steel output for the automotive and shipbuilding industries continued to grow.

CISA Chairman Yao Lin said that since the beginning of this year, China’s steel sector has been facing challenges, including an imbalance between supply and demand, falling steel prices, high raw material prices and low economic efficiency.

The main driving force to support the country’s steel sector, according to Yao, will be the manufacturing industry. Rapid development of new energy vehicles, increased orders for new energy ships and accelerated renovation of old ships will support steel demand, and large-scale equipment upgrades will provide opportunities for the development of the relevant industry.

At the same time, according to a survey by the National Development and Reform Commission’s (NDRC) Price Monitoring Center released on July 31, the Chinese steel market is cautiously optimistic about the outlook for August, Mysteel Global said.

The NDRC survey, which measures expectations on six key parameters, showed that the indices of expected sales prices and purchase prices for August for wholesale markets were 50% and 48.1%, respectively. This represents an increase of 12.7 and 3.7 percentage points compared to the previous month. According to the NDRC report, these figures indicate an improved, though still cautious, market sentiment.

The index of expected sales volume in August rose to 61.1%, which is 13% more than in the previous month, while the index of expected inventory fell to 44.7% (-12.8%).

The NDRC predicts that market sentiment is likely to recover somewhat as the reduction in supply by steelmakers will help balance the dynamics of supply and demand in the domestic market. According to the report, some recovery in sentiment may slightly raise domestic steel prices this month.

As GMK Center reported earlier, China’s macroeconomic indicators showed a downward trend in the first half of the year, with steel production falling amid a decline in steelmakers’ margins.