Why China’s Steel Prices Could Come under Pressure in H2 2018

While strong margins have been prompting Chinese steel mills to continue increasing output for the last several months, economic jitters have started to weigh on margins. The steel prices in China remained more or less range bound in June despite lower inventories. The ongoing tit-for-tat trade tariffs and the impact of China’s new monetary measures could have a far-reaching impact on the activity in a number of sectors in the country, impacting steel demand. Thus, market participants are currently on the sidelines waiting for more clarity.