OREANDA-NEWS. April 29, 2014. China Steel Corporation (CSC) held domestic price meeting for June shipment and announced the following statement:

From the global economic perspective, the U.S industrial production has been going strong for the past two months, and the employment rate and consumer confidence have been rising. The economy is clearly overcoming the harsh impact of the cold weather and regaining its growth momentum. Meanwhile, there has been continuous QE tapering.

However, the Fed will minimize expectations of increasing interest rate, thereby relieving any negative impacts on emerging markets. Eurozone’s economy is recovering moderately and European Central Bank is unchanged on its stance of quantitative easing monetary policy. On the other hand, China is facing painful industry structural adjustment. The GDP growth rate has slowed so there is mounting pressure on the government. Therefore, the government has rolled out income tax incentives, accelerated railway construction, and other stimulus plans for small and micro enterprises; this is expected to lift domestic demand and investment willingness effectively. Overall, the global economy is improving steadily, albeit interfered with rising geopolitical tensions and other unfavorable factors. The IMF lowers this year’s economic growth forecast to 3.6%, but it is still stronger than last year’s performance.

Influenced by the global economic recovery, steel demand has been showing an upward trend. World Steel Association (WSA) predicted that this year the global steel consumption will increase 3.1%, reaching 1.53 billion MT. As warm weather returns in the U.S., manufacturing and construction industries restore their momentum. Steel mills receive increasing orders, and gradually boost their prices. In the Asian steel market, although the demand in second quarter, traditionally the peak season, is not as strong as expected, Chinese steel social inventory levels and major steel mills inventory levels have been decreasing drastically since March. Furthermore, some steel mills have undergone equipment inspection and maintenance since April. Japanese and Korean steel mills have continuously tried to increase their prices, and with the iron ore and steel scrap prices recently bouncing back after bottoming out, international steel prices have fallen and then risen from the bottom. With deferred demand slowly being released, short term steel prices will be supported.

Encouraged by the rebound in international steel prices, domestic downstream steel industries have experienced increase in export orders and prices. The prices of major steel products in domestic market have stopped falling and gained steadiness. However, the demand remains to be stimulated as there is still risk of uncertainty in the global economy. To boost downstream demand and strengthen market confidence, CSC has decided to keep steel prices unchanged for June shipment.