Panoramic insights into the international steel market: analysis of prices, supply, demand and trade patterns

一. Price trend: obvious differentiation in the shock

1. Comprehensive index fluctuates

Recently, the global steel benchmark price index has fluctuated to a certain extent. After the previous ups and downs, the current index is 90.9 points, showing a 0.3% increase from the previous period, but this increase has narrowed compared with the earlier stage. Among them, the long steel index is 108.3 points, a 1.1% decline, turning from the previous upward trend to a decline; the price index of other categories such as flat steel has also changed, reflecting the differences in market demand for different steels.

2. Regional prices rise and fall

As an important region for global steel production and consumption, Asia's steel benchmark price index is 102.7 points. Although it has dropped by 0.2% compared with the previous period, it still has a 2.2% increase in a longer period of time. As a key force in the Asian steel market, China's steel index is 104.1 points, down 1% from the previous period, but up 2.4% compared with the earlier period. The index for the Americas region was 105.2 points, with a slight increase of 0.1%; the index for the Europe region was 87.1 points, maintaining a stable trend, ending the previous downward trend, and with a 0.2% increase compared to the earlier stage.

3. The price difference between varieties is significant

• Flat materials: In India, as the government is about to implement new goods and services tax (GST) regulations and the relevant implementation details have not yet been clarified, the market is filled with wait-and-see sentiment, and domestic hot-rolled coil sales are hindered. At present, the ex-factory price of hot-rolled coils in the Indian market is generally between 35,500 and 36,500 rupees per ton (about 551 to 560 US dollars per ton), and the tax-inclusive price is between 41,900 and 43,100 rupees per ton. In Mumbai, the ex-factory price of 3 mm hot-rolled coils is stable at 35,500 to 36,500 rupees per ton, and the tax-inclusive price is 42,000 to 43,000 rupees per ton. Affected by the downturn in China's steel market, the price of hot-rolled coils in Asia has generally declined. In mainland China, the price of ordinary hot-rolled coils is between $440 and $450 per ton (FOB). Buyers in East Asia are reluctant to purchase. Buyers in Pakistan and Bangladesh expect to purchase at $435 per ton (FOB), and Korean traders have even lowered the price to $430 per ton (FOB). Vietnamese buyers have even lowered the price of cold-rolled base materials to $425 per ton (cost plus freight).

• Long products: With the advent of the Muslim holy month of Ramadan, the demand for long products in the UAE has decreased significantly, and the import market for rebar and billet has fallen into a slump, with most procurement activities on hold. At present, the import cost of rebar in the UAE is between $430 and $450 per ton (CFR), and the import quotation of billet is between $400 and $410 per ton (CFR), and the price remains stable month-on-month. In Taiwan, Fengxing Steel has raised the price of rebar due to increased market demand. The price of 13mm rebar rose by NT$500 per ton to NT$14,500 per ton (about US$483 per ton), and this upward trend has continued for two weeks. Affected by the domestic market trend, the prices of rebar and wire rod in Asia have fallen slightly. The rebar price of Chinese steel companies is US$465 per ton (FOB), and the price of wire rod is about US$460 per ton (FOB), but overseas buyers generally believe that the offer is too high. Singapore buyers expect to buy rebar at US$420 per ton (FOB), and small-scale transactions have been concluded at US$435 per ton (cost plus freight). Some steel traders pointed out that Russian rebar and wire rod have obvious price advantages. The price of Russian rebar is US$430/ton (CFR), and the transaction is active. The wire rod shipped to the Philippines is quoted at US$440/ton (CFR), which is about US$20/ton lower than similar products in China. 

二. Supply and demand: new changes and challenges

1. Supply side: dynamic adjustment of production capacity and resource allocation

• Global iron ore shipments and domestic arrivals: Global iron ore shipments have rebounded significantly recently, mainly due to the significant increase in Brazil's shipments, and Australia and non-mainstream regions have also seen an increase in shipments. However, domestic iron ore arrivals have fallen during the same period, and the recent increase in port clearance has led to a decline in iron ore port inventories on Monday. In terms of domestic mines, with the continuous improvement of mine capacity utilization, domestic iron ore concentrate production has achieved a slight increase in recent days.

• Steel production and cost: Mysteel's survey shows that in a certain period of time, the average molten iron tax-free cost of mainstream sample steel mills in Tangshan was 2,148 yuan/ton, and the average steel billet tax-inclusive cost was 2,898 yuan/ton, a decrease of 4 yuan/ton from the previous period. Compared with the current ex-factory price of ordinary square billets of 2,930 yuan/ton, steel mills made an average profit of 32 yuan/ton, a decrease of 46 yuan/ton from the previous period. SMM survey shows that the number of blast furnace maintenance has increased month-on-month recently, and the output of molten iron is expected to fall slightly. According to the data of Steel Union, the operating rate of blast furnaces has dropped slightly, and the average daily output of molten iron has decreased by 8,700 tons to 2.4477 million tons, but the profit rate of steel mills has increased slightly to 59.31%. During the same period, the iron ore inventory of steel mills increased slightly, but the daily consumption of imported ore decreased, and the inventory-to-sales ratio of imported ore increased slightly.

• Adjustment of European flat steel supply: Faced with the impact of weakening market demand and imported resources, Western European steel companies have taken measures to reduce the ex-factory prices of hot-rolled and cold-rolled coils. The ex-factory price of hot-rolled coils in the Ruhr area of ​​Germany has dropped to 550 to 570 euros per ton, and the ex-factory price of cold-rolled coils is 600 to 610 euros per ton, with a decrease of 50 to 60 euros per ton.

 
 2. Demand side: Domestic and international demand trends diverge

• Domestic demand structure diverges: Steel inventory in Gangyin City continued to decline on Monday, and inventories of all varieties decreased. The steel factory warehouses and social warehouses of Zhaogang and Ganggu are still declining, but the decline in total inventory has narrowed. The demand for steel is differentiated, the demand for building materials has fallen, and the demand for hot-rolled coils has rebounded. According to a survey by Centennial Construction, the national cement outflow volume in a certain period was 3.613 million tons, up 0.8% month-on-month, and the direct supply of infrastructure cement decreased by 1% month-on-month; the concrete shipment volume was 1.637 million cubic meters, up 1.35% month-on-month; but the funding rate of the sample construction site was 58.89%, down 0.21 percentage points week-on-week, and the overall downstream demand for construction showed a complex situation.

• International demand is constrained by multiple factors: entering the Muslim Ramadan, the demand for long products in the UAE has decreased, and procurement activities have been generally postponed. In Southeast Asia, affected by the continuous decline in the Chinese market, buyers are extremely cautious, and even some orders have been withdrawn, and market sentiment is pessimistic.

 
三. Trade policies and events: reshaping the market pattern

1. Trade protection measures are frequent

The Vietnamese Ministry of Industry and Trade decided to impose a 19% safeguard duty on imported color-coated steel sheets (PPGI), which will be implemented on June 15 for a period of 3 years. This measure will affect the import and export pattern of related steel products and restrict the trade circulation of some products.

The Pakistan National Tariff Committee initiated a preliminary ruling on the anti-dumping investigation on rebar products imported from China, and determined that there was dumping and substantial damage to the domestic industry. Although no temporary anti-dumping duties have been imposed, the follow-up situation has attracted much attention. Subsequently, the committee decided to initiate an anti-dumping investigation on color-coated steel coils/plates produced or imported from China and South Africa; at the same time, the government was required to impose anti-dumping duties on API grade X-70 steel pipes from China.
The Indian Ministry of Commerce appointed the Anti-dumping and Joint Taxation Directorate (DGAD) to investigate the trade of related steel products.

2. New developments in the trade environment

The China-US economic and trade talks have made substantial progress. The two sides have significantly reduced the level of bilateral tariffs and suspended the implementation of a 24% "reciprocal tariff" for 90 days. This move has significantly improved expectations for external demand, but policy uncertainty after the suspension window period still exists. Some demand may rush to export during the window period, which will provide some support for short-term steel demand.

The China-ASEAN Special Meeting of Trade Ministers was held online, and the trade ministers of both sides jointly announced the full completion of the China-ASEAN Free Trade Area 3.0 negotiations. This achievement will create new opportunities for trade in the region, including steel, and promote the deep integration of regional industrial chains and supply chains.

四. Outlook for the future: Opportunities and challenges coexist

Looking ahead, the international steel market will continue to adjust under the influence of many factors. From the demand side, although some regions may experience demand fluctuations due to policy stimulus or seasonal factors, the uneven global economic recovery and the uncertainty of trade policies will still bring great pressure to steel demand. On the supply side, companies will adjust their production capacity accordingly based on cost changes and market price dynamics.

In terms of price, the prices of various types of steel are expected to continue to fluctuate around the current level, waiting for the supply and demand relationship to become clearer and new guidance from the macroeconomic and trade environment. For investors and related companies, it is necessary to pay close attention to the policy trends, macroeconomic data and industry dynamics of various countries, seize market opportunities in a timely manner, effectively respond to potential risks, and seek a path for sustainable development in a complex and changing market environment.