STEEL NEWS

Chinese steel prices may continue to rise after the holidays

China's steel prices have generally remained stable with slight increases during the Chinese New Year, SMM reported. In particular, some factories in the east and south of China raised their offers by 30-100 yuan/t during the holidays.

To the best of SMM's knowledge, most steel mills in northern China were producing as planned during this period, with only a few of them completely halting production due to strict production restrictions.

Steel prices rose in northern China amid supply concerns. On the demand side, domestic production is expected to rebound steadily after the yuan weekend as the COVID-19 pandemic is well contained compared to the pre-holiday situation.

At the same time, the expected snow in central and eastern China on February 6-8 will somewhat hinder the recovery of production.

Steel prices are likely to continue their rise in the post-holiday period on the back of relatively optimistic market sentiment during the holidays.

Iron ore prices are likely to be regulated again by the central government, and production restrictions associated with the Winter Olympics will lower iron ore prices. At the same time, coke supply and demand patterns are expected to weaken, which could lead to lower coke prices. As such, post-holiday spending is expected to be sluggish, reducing upside potential for finished product prices.