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January, 21st 2018

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China Steel Intelligence

Issue 21 05 Jan 2018

CSI: Strap yourselves in for a bumpy 2018

As the new year begins the outlook for Chinese steel is far more positive than it was a year ago, but it is unlikely to repeat the success it had over the last twelve months.

In this issue we break down our forecasts for the year by sector, as well as the key overarching trends, especially in policy, which inform our numbers.

Our conclusions are that, while overall demand is unlikely to grow further and should trend slowdown down over the coming years, short term volatility will remain high, or even increase.

The political environment is priming prices for sudden and unexpected movements, and market participants will have to react quickly to make the most of short term opportunities.

The question now is, how wrong will the analysts be this year? And why?

 

Issue 20 01 Dec 2017

China supercharged winter masks glacial shifts in demand

The start of winter restrictions has sent steel prices higher, especially for rebar, and iron ore has followed in hot pursuit, as we describe in our markets section. Now however, attention is turning from winter to the coming year. Ahead of an end-year round-up and more detailed predictions in the December issue, we first lay the groundwork for understanding China’s steel markets in 2018.

Most notably, this is a good month to take a step back and look at the bigger picture. China’s steel demand, overshadowed by the drama of this year, is in fact continuing to develop broadly along lines seen since 2014. Understanding how those broader trends interplay with the sudden impacts of policy changes will be key to the coming year.

The question now is, will China maintain the fine balance between sufficient reform and maintaining stability?

Issue 19 01 Nov 2017

CSI: Xi calls the shots

Chinese president Xi Jinping has dominated headlines as well as the Chinese Communist Party this October. In economic terms supply side reform is the key policy and now constitutionally required for party members. What that means depends on the details of policies over the coming year. But in this issue we revisit the supply-demand balance over the winter in light of the latest updates.

We also take an opportunity to look at some of the side effects of China’s policy, such as growing induction furnace capacity and scrap demand in Southeast Asia. The key for prices however is still the conflict between policy restrictions and the desire for profit.

The question now is will output restrictions support the market, or will oversupply sink prices?

Issue 18 03 Oct 2017

CSI: China curbs forcing markets out of balance

China’s futures triggered a sudden drop in prices last month but now the market is turning back to fundamentals. With the next peak demand season upon us however, restrictions on both industrial output and steel consuming sectors have put market balance in doubt.