Steel rolling has its worst week

Stal had a bad week. Prices in China have fallen as inventories in the country have risen, which account for half of the world's supply, and increased trade protectionism in the US could only make matters worse.

Stocks in China could be expanded even further as factories prepare to ramp up production following the end of winter restrictions. And now President Donald Trump has imposed 25 percent tariffs on US imports, with a few exceptions, raising concerns that the steel blocked by these actions could go back to global markets.

There is also a growing fear that responses from countries targeted by tariffs will switch products and escalate into a global trade war, exacerbate the global economy and affect everything from copper to crude oil. China, the largest consumer of goods, has already said it will take "strong" measures to protect its interests.

Steel rebar futures, a reference product used in construction, fell 7.8% this week in Shanghai, the worst in a year. Shares in Baoshan Iron & Steel Co., China's largest producer, have lost 13 percent in the past two weeks, including a 3 percent drop on Friday after Trump signed the decree. Other Asian steelmakers were also down on Friday, including Posco, down 3.6% in Seoul.

Analysts in China attribute the price cut not only to Trump's tariffs. “Demand did not recover as strongly as the market expected, which led to a rapid increase in steel stocks,” said Zhao Xiaobo, an analyst with the Chinese brokerage company Sinosteel Futures Co. “Concerns about high inventory levels will continue to affect the market,” he said.