Although the removal of the additional 20% tariff imposed by the United States on Chinese goods is a positive development, the broadening of global trade barriers has weighed on export expectations and increased risk aversion in financial markets.
In China, post-holiday inventory accumulation and uncertainty are limiting demand, while more encouraging signals are emerging from Vietnam. The acceleration of public investment projects and improving weather conditions have supported construction and logistics activities, helping to sustain steel demand. Hoa Phat Group views its strong sales performance following the extended Tet holiday as a sign of growth.
In India, the anticipated increase in steel prices and sales performance during China’s holiday period did not deliver the expected impact. Nevertheless, it was announced that steel products will continue to be classified under the “essential goods” list in order to prevent a sudden decline in production within the sector.
According to a market source, cash flow conditions for Chinese steel producers and end-users remain very weak, particularly in the construction sector and rebar-related segments. Most construction sites were facing payment difficulties prior to the holiday, which is expected to make the resumption of work slow and challenging, thereby delaying the recovery in steel demand. The current market trend is likely to persist at least until the end of March, when a clearer picture of domestic steel demand in China will emerge. However, with the era of large-scale investment and debt-driven financing now effectively over, it is difficult to remain optimistic.
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