Chinese Steel exports for the month of July were up by 133% year on year according to mysteel.com whilst imports were down by 28%.
Already the effect of Chinese exports have been felt in Taiwan, and it is only a matter of time before reduced consumption in China combined with their greatly increased production capacity starts to impact further afield.
An article in Purchasing.com on Wednesday reported that whilst prices continue to rise in North America, some evidence of prices sliding back a little can be seen worldwide. This is due to world capacity beginning to outstrip demand, particularly in China. If the Chinese Government, are determined to “cool down” domestic demand, then Chinese exports are likely to increase, putting inevitable downward pressure on prices.
Whilst it is good for steel consumers that we may see a stop to the price rises that have been accelerating during this year, a period of price stability would most desirable. Whilst the price of steel has always been subject to cyclical fluctuations, any significant price collapses will ultimately benefit no one.