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Based on recent industry data and market analysis, China's steel prices in March are expected to show a weak and fluctuating trend, with a possible narrowing of the decline. Below is a summary of key data and predictions:
| Steel Type | Price Trend | Key Influencing Factors |
| Rebar | Weak and fluctuating | Insufficient new real estate projects, limited infrastructure growth, slow inventory reduction |
| Hot Rolled Coil (HRC) | High supply pressure, weak | High production, significant inventory pressure, limited manufacturing demand support |
| Section Steel | Continued weakness | Weak real estate demand, infrastructure growth unable to fully offset the decline |
| Plates (Industrial) | Partial recovery | Policy-driven demand from auto and home appliance replacement, high growth in shipbuilding orders |
| Overall Steel Prices | High early, low later, downward trend | Weak demand recovery, reduced iron ore cost support, export policy uncertainty |
Summary:
The steel market is anticipated to continue its weak performance, primarily driven by sluggish demand recovery, elevated inventory levels, and declining raw material costs. The slow rebound in demand, particularly from key sectors such as construction and infrastructure, has been a significant factor contributing to the subdued price environment. Additionally, high inventory pressures persist as steel mills and distributors grapple with excess supply, further weighing on market sentiment. The decline in raw material costs, including iron ore and coking coal, has also exerted downward pressure on steel prices, as lower input costs reduce the overall cost structure for steel production.
Impact of Price Trends on PPGI/GI Products
PPGI (Pre-Painted Galvanized Iron) and GI (Galvanized Iron) are deep-processed steel products, and their prices are closely related to the cost of hot rolled coil (HRC):
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Cost Transmission Effect
Hot - Rolled Coil (HRC) constitutes 60% - 70% of the production costs for Pre - painted Galvanized Iron (PPGI) and Galvanized Iron (GI). Given the anticipated decline in HRC prices in March, the production costs of PPGI and GI are likely to decrease correspondingly. However, it is essential to take into account the fluctuations in coating processing fees, which can significantly impact the overall cost structure.
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Export Competitiveness
A downward trajectory in domestic steel prices has the potential to enhance the price competitiveness of Chinese PPGI and GI exports in the international market. Nevertheless, it is crucial to closely monitor the risks associated with anti - dumping policies. For instance, countries like Vietnam and the United States have imposed tariffs, which could undermine the export advantage and pose challenges to the growth of exports.
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Supply - Demand Balance
The substantial supply pressure of HRC may prompt steel mills to reorient their production towards high - value - added products such as PPGI. This strategic shift will lead to an increase in the market supply of PPGI. As a result, the potential for a price rebound in the PPGI market will be restricted, given the relatively stable or decreasing demand in the short term.
Impact on Importers
Short - Term Price Opportunities
Amid the low - level fluctuations of steel prices in March, importers have a prime opportunity to capitalize on this window by locking in low - price orders. However, it is of utmost importance to closely monitor the fluctuations in the RMB exchange rate, as these can significantly impact the overall cost of imports. Additionally, shipping costs, which are subject to various market factors such as fuel price changes and global shipping capacity utilization, should also be carefully considered.
Long - Term Risks
Policy Uncertainty: Potential tariffs under the U.S. Trump administration and increased anti-dumping investigations in the Middle East and Europe may indirectly affect supply chain stability.
Quality and Delivery: Domestic steel mills may reduce quality control to cope with cost pressures, so strict supplier screening is essential.
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