According to data, the national average price of hot-rolled coils fell by 9.64% from its peak at the beginning of the year to 3,717.83 yuan/ton (USD 512) at the end of June. This decline was mainly driven by the downturn in the real estate sector and a decrease in demand.
Rebar prices reached a high of 4,116 yuan (USD 567) per ton on January 3rd and fell to a low of 3,589 yuan (USD 495) per ton on April 1st, a difference of 527 yuan/ton (USD 72). On June 28th, the absolute price index of rebar fell to 3613 (USD 498).
Despite the challenges faced by the steel market in the first half of the year, analysts expect steel prices to rebound in the second half. Li Huan, one of China's leading steel analysts, stated, "We predict that prices will follow an upward trend, supported by seasonal factors and a resurgence in demand in the second half of the year. Notably, the acceleration of infrastructure projects and supportive policies implemented in the real estate sector will be key drivers of increased steel demand."
Expectations for the future also incorporate the impact of the international market. China's steel exports have significantly increased due to the global economic recovery. This contributes to maintaining the competitiveness of China's steel sector on the international stage.
However, the steel market still faces some challenges. Li Huan emphasized, "Structural issues such as overcapacity and supply-demand imbalances are key factors limiting a stable rise in prices. Particularly, increases in production capacity can exacerbate supply pressure, potentially pulling prices down."
Beyond fluctuating steel prices, steel producers are also grappling with financial difficulties. Data suggests that some steel products continue to operate at a loss as of June 2024. Fluctuations in production costs remain a significant factor impacting steel producers' profitability.
In conclusion, the steel market appears poised to continue on a volatile path in the second half of 2024, driven by demand and supply dynamics. Analysts expect the market to balance and prices to stabilize in the second half of the year, but acknowledge the existence of risk factors that warrant caution.
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