At the beginning of 2024, the section steel market faced a weak demand environment. Especially in January and February, a downward trend in the market became evident due to off-season demand and tight financial restrictions. During this period, steel mills completed maintenance work early, which created pressure on the supply side. The decline in raw material prices also pulled down steel profile prices.
In March, steel producers started increasing their production capacity, which led to some recovery in the market. The increase in demand caused prices to fluctuate and rise. However, high temperatures and rainy weather conditions throughout the country in April negatively affected construction projects and demand weakened again. This situation caused steel profile prices to decline again.
Starting from May, steel profile stocks began to increase significantly. Although production decreased, inventories remained at high levels, increasing supply pressure. In June, industry players began conducting mid-year capital reviews and demand declined once again. During this period, steel profile prices decreased again.
In the first half of 2024, steel profile production amounted to 26.317 million tons, with a decrease of 2.72 million tons, or 10.36%, compared to the same period last year.
A balanced supply-demand model is expected for the Chinese section steel market in the second half. The negative atmosphere in the market is expected to ease with the impact of macroeconomic recovery news and support policies for infrastructure projects. In October, there may be an imbalance between supply and demand, indicating the possibility of a short-term recovery in prices.
Changes in raw material prices directly affect steel profile costs. The decline in coke and steel billet prices in the first half of the year led to a decline in steel profile costs. But as production decreased and inventories continued to accumulate, supply pressure had a negative impact on prices.
The Chinese section steel market seems to focus on the balance of supply and demand in the second half of the year. Changes in production and developments in infrastructure investments stand out as the main factors that will determine the course of prices in the market. With the implementation of strong economic policies and projects, stabilization and perhaps a slight recovery in steel profile prices is expected.
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