Kallanish Kallanish

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November, 20th 2017

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China Steel Intelligence

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.

 

Issue 17 31 Aug 2017

CSI: China gambles on speculator curbs

China’s steel markets gained strength again in August, sending spot prices higher and boosting confidence. This strength is causing two separate issues, weak exports and increased futures trading. Higher futures prices have now prompted curbs on speculators, sending ferrous futures markets into confusion. Ironically, attempts to reduce the risk of speculators crashing commodity markets is creating uncertainty over when and how the government will intervene. In this issue we look at whether or not risk has been increasing in ferrous futures markets and whether interventions are helping.

Issue 16 31 Jul 2017

CSI: Second half has a lot to live up to

After a stronger-than-expected first half it is time to review Kallanish’s expectations for 2017. In this issue we revise our output data to account for induction furnace capacity, and look at the knock-on implications for apparent and end user demand.  Because including induction furnaces means our forecasts won’t match official data, this year we will publish two sets of forecasts: one set covers output and demand including induction furnaces; the other is where this should leave official data.