China’s domestic prices continue to rise for the week ending February 15th, with Rebar 20mm experiencing the greatest increase week over week of $26.81/ton and Channel #16 experiencing the lowest increase w/w of $20.23/ton.
Although China continues to push efforts to reduce their steel output in 2017, BMI research shows that China is expected to produce 825 million metric tons of crude steel for 2017 which is a 0.5% increase from 2016. Though many western countries fear that this will lead to a global steel market surplus, China plans to consume 87% of this production due to an increase of domestic demand. Due to the growing demand in construction, we can expect to see the global steel surplus narrow from 10.9 million tons in 2016 to 3.2 million tons for 2017.
With the domestic demand increasing we can expect to see China’s steel prices to remain strong in 2017.