Steel prices plummeted by 1% in week 26 arising concern about another round of correction. Alarmingly the mills have been on a production rampage in anxiety of not losing market share to tier 2 and 3 mills.
Inventory levels have touched a preposterous 12 million tonne in May. At the same time month end credit tightening is customary tying the hands of traders for further purchase. Logistical problems during monsoon have added to the morose.
However insiders are optimistic about turnaround in Q3 typically period of peak consumption. Moreover a slew of large products sanctioned earlier will enter full scale construction.
Certainty remains elusive however hope is the only recourse.
CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index
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Source - Steel Prices China