Rebar prices in China's markets have decreased to below CNY 3,100 (approximately $425) per ton, nearing their lowest level in the past two weeks. This decline is due to persistent weakness in demand and the release of disappointing economic data from the world's largest steel consumer, China. The Chinese steel market is currently under pressure from weak demand and an uncertain economic outlook.
Decline in Profitability and Production at Steel Mills
Industrial profits in China fell in August due to weak domestic demand, which has not been compensated by strong production in advanced technology sectors and AI-related manufacturing. Chinese steel mills also faced a renewed decline in profitability last week. The average daily production of hot metal has also seen a drop.
Proposed Measures to Control Supply
The China Iron and Steel Association has urged steel manufacturers to reduce production and lower their inventories to protect their profit margins and prevent oversupply. This request is aimed at addressing the current market conditions and maintaining a balance between supply and demand.
Additionally, data released by the World Steel Association indicates that global crude steel production in August decreased by 1.2 percent compared to the same month last year, reaching 144.2 million tons. This production decline reflects serious challenges in the global steel industry and may lead to lower prices and profit margins in the future.
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