Issue 33, 2024 - This week's editorial: Tanking prices scare Chinese steelmakers, trade case explosion grows

Different week, same old story. Chinese prices continued to tank, prompting even Chinese steelmakers to warn of the severity of the situation, while the recent trend of snowballing trade cases showed no signs of letting up.

Chinese rebar prices slumped to levels not seen since 2016, the last time low-priced Chinese steel supply flooded the global market. HRC export prices slumped another $20-30/tonne from already low levels. Chinese steel mills are sounding the alarm, with concerns mounting that current conditions might be graver than those witnessed during the 2008 financial crisis and the 2015 bubble.

China Baowu chairman Hu Wangming warned of a longer, more-difficult-than-expected "winter" for China’s steel industry, while Shagang chairman Shen Bin said the supply-demand imbalance will persist for the remainder of the year.

While July data showed a significant dip in crude steel production due to maintenance and output cuts, these measures have not been sufficient to halt the market's downward spiral. Chinese mills face a tough choice. Output cuts could bolster market confidence, but could lead to lower future output and revenue, in addition to higher costs per tonne. For more, see the Asia section.

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