On March 10 of this year, the total domestic stocks of the five main finished steel products in 21 major cities of China amounted to 11.64 million tons, an increase of 0.76 million tons. or 7.0 percent compared to February 28, as announced by CISA. Meanwhile, on March 20 of this year, the total domestic stocks of the five main types of finished steel products in 21 major Chinese cities totaled 11.64 million tons, remaining stable compared to March 10, signaling that demand improved to some extent later in March.
Regarding the future of the market, CISA urged market participants to be attentive to the constant increase in commodity prices caused by geopolitical factors. conflicts that are likely to reduce profits in the steel industry. Due to the escalation of geopolitical conflicts in the Middle East, international oil prices exceeded $100 per barrel, raising concerns about the global energy supply chain, which also led to higher prices for coking coal and coke, which provided reliable support for steel prices.
After the blockade of the Strait of Hormuz, transportation costs are expected to rise, which is likely to lead to higher prices for iron ore and coal, which could further increase the overall production costs of steel. Consequently, the profitability of steel mills will be under pressure.
In addition, the demand for steel from processing consumers has been slowly improving, which may negatively affect steel prices. CISA advised steelmakers to remain cautiously optimistic and organize production rationally in April.
