According to data obtained, some steel manufacturers in South China have started implementing factory gate prices as low as 3,200 yuan/ton (439 USD), the lowest level in the past two years. Particularly in Guangxi, steel prices dropped by more than 300 yuan/ton (41 USD) in June, directly linked to weak local market demand.
The heavy rains in Guangxi, accompanied by a 35% increase in precipitation compared to previous years, have caused significant impacts such as floods and damages. This situation has halted outdoor construction projects and severely reduced steel demand. Similarly, in Guangdong and Hunan, demand for steel products has markedly declined, with prices falling well below national averages.
Steel companies have begun reducing production capacities to balance the decrease in production. It's reported that daily construction steel production in Guangxi has decreased by approximately 15,000 tons. Additionally, similar trends are observed in other provinces of South China; steel shipments in Guizhou are about 40% lower than normal, and local steel prices have reached the lowest levels of the year.
In summary, intense rainfall in southern regions has further depressed already weak steel demand and adversely affected prices. Experts anticipate steel prices will continue to fluctuate due to the ongoing impact of weather conditions in these areas in the near future.
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