China Iron & Steel Association has released the monthly review, predicting domestic steel prices would tend towards stabilizing amid modest corrections in days to come. Domestic steel prices have fallen across the board.
    At the end of August, Chinese composite steel price index plunges to 152.22 points down by 5.45% MoM the biggest monthly decline in two years.

    The association has attributed the price decline to weakening demand following slower industrial production growth and limited steel consumption due to liquidity strains. Moreover, various restraints during Olympics have also dampened the demand. Market participants are sitting on the fence in light of slipping raw materials prices and freight rates. They also fear that Beijing might further adjust the export tax policy in near future.

    Nevertheless, CISA remains upbeat about future steel market, adding that healthy domestic economic prospect would place a solid floor under the steel market, despite global economic slowdown and weakening steel demand.

    The association urges market participants to keep a close eye on moderating steel output growth, likely shifts in import and export, and growth momentum in upstream and downstream sector etc. They should make concerted efforts to realize market balance.