Analysis of steel price rises and falls in the first half of 2024

In the first half of 2024, steel prices generally showed a shocking downward trend. Taking hot rolled coil as an example, the highest price appeared at the beginning of the year, reaching RMB 4200 per tonne, but then the market price gradually declined, and as of the end of June, the national average price stood at RMB 3800 per tonne, a cumulative decline of 10% from the high price at the beginning of the year. This downward trend was mainly affected by the following factors:

Weak demand: the downturn in the real estate market has had a serious impact on the demand for hot rolled coil and other steel, and its related industries such as steel structures and machinery have also been affected, resulting in overall sluggish demand.

Overcapacity: HRC production in the first half of the year totalled 155.9737 million tonnes, an increase of 11.19% year-on-year, and the continued increase in the supply side has further aggravated the contradiction between supply and demand in the market.

Raw material cost changes: although iron ore and coking coal and other raw material prices also fell, but the decline is smaller than steel, the support of steel prices is limited.

Policy regulation: the continued impact of environmental protection policies and capacity regulation, so that the steel production has been limited to a certain extent, but did not fully offset the impact of the decline in demand.

Steel price outlook for the second half of 2024

For the second half of 2024, steel prices are expected to show small fluctuations due to a variety of factors. Specifically:

Supply and demand: crude steel production is expected to remain high, but demand recovery is likely to remain slow. However, the recovery of manufacturing demand may become a new driving force for the market, helping to alleviate some of the supply-demand conflicts.

Cost support: High raw material costs, especially iron ore and coking coal prices, will provide solid bottom support for steel prices. Iron ore prices are expected to pivot between $100-130 per tonne, and coking coal prices pivot between RMB 2,000-2,100 per tonne.

Policy regulation: Environmental protection policies and capacity regulation will continue to affect steel production, which in turn affects prices. The tightening or relaxation of policies will have a direct effect on market supply, thus affecting price fluctuations.

Global economic impact: Uncertainty in the global economic environment, particularly changes in international trade relations, will have an indirect impact on steel demand and prices.

Prices may be pushed up in the third quarter as inventories are de-stocked and hoarding behaviour before the peak season; prices may also rise in the fourth quarter under the support of environmental protection policies and a low inventory environment. But overall, prices are unlikely to fall or rise sharply, but rather show small fluctuations in the role of a variety of forces.

The stable price of raw materials is favourable for customers to purchase our KITCHEN STORAGE RACK and FRUIT STORAGE BASKET from FOSHAN EVER RISING.

Although the global market environment is complex and volatile, and the economy is in a downturn, we are gradually seeing sporadic purchasing activities in various markets. In the second half of 2024, the stabilisation of raw material prices and overall production costs will help to reduce prices and attract customers from all over the world to our company. F.E.R. is also launching new products in a variety of materials, including stainless steel and aluminium, which are available on our website.