en 
Call
+8613166245535
Overview
In March, China’s steel market trended downward, with the composite steel price index dropping 55 points. Key product declines included rebar (-99 points), wire rod (-90 points), hot-rolled coil (-46 points), and cold-rolled coil (-70 points). Only medium plates saw a slight rise (+28 points). Raw materials also weakened: iron ore (62% CFR) fell $1/ton, scrap steel dropped 73 points, and coke declined 102 points. Entering April, early bearish pressures may persist, but a rebound could emerge as fundamentals improve and supportive policies take effect.
On March 28, five Chinese ministries jointly issued regulations to curb tax evasion in steel exports:
New Rules: Exports of taxable goods now require domestic VAT (13%) and consumption tax payments, closing loopholes for “fake export invoicing” (estimated at ~1 million tons/month).
Impact: Reduced export flexibility may pressure domestic demand, risking inventory buildup and price declines for non-construction steel varieties.
April 3 Deadline: 25% tariffs on Venezuelan oil imports and auto parts take effect. Threats of additional tariffs on semiconductors, pharmaceuticals, and agriculture loom.
Steel Demand Risks: Tariffs targeting machinery, vehicles, and appliances—key steel-consuming sectors—could disrupt exports, indirectly hurting domestic steel demand.
Pessimism: Concerns over peak demand, rising supply, and raw material cost volatility dominate market sentiment.
Raw Material “Negative Feedback”: Falling scrap and coke prices squeeze margins, discouraging production cuts.
Inventory Reductions: Despite high blast furnace utilization (avg. 233,700 t/day iron output), March saw 1.4132 million tons of inventory drawdowns across five major products. Rebar and wire rod stocks fell 32.8% and 37.7% YoY, respectively.
Production Discipline: Mill restarts slowed in late March, with April output growth projected at 50,000–100,000 tons for major products.
Manufacturing PMI: Rose to 50.5 (expansion zone) for two consecutive months, though export orders weakened.
Sectoral Growth: Machinery, appliances, autos, and steel structure material demand rose 11.29%, 11.39%, 4.8%, and 3.89% MoM, respectively.
Production Controls: Expected mid-to-late April implementation of steel output caps could stabilize prices.
Liquidity Support: Recent RMB 520 billion capital injections and RMB 100 billion reverse repos aim to boost market stability.
Early April: Bearish pressures dominate due to export regulations and tariff risks.
Late April: Rebound likely if demand accelerates, inventories decline sharply (>800,000 tons/week), or production controls take effect.
Mills: Prioritize profitable production lines; avoid overproducing low-margin goods.
Traders: Rebuild confidence cautiously; avoid panic selling amid improving fundamentals.
End Users: Flexibly increase procurement to leverage potential price dips.
