On July 18th, China Steel Corporation (CSC) held domestic price meeting for September shipments and announced the following statement:

From the global economic perspective, even though the QE3 continues tapering, the U.S. manufacturing sector and the economic indicators regained growth momentum. As for Euro zone, affected by geopolitical risks and financial instability, the E.U. economy has been growing moderately but still fragile. The European Central Bank has applied unprecedented negative interest rate and new quantitative easing monetary policy to avoid deflation. On the other hand, the latest PMI and GDP indicators showed that “mini-stimulus” and infrastructure investment policy in China has received several positive results and economy has bottomed up. Overall, economic research institutes have lowered global growth forecast slightly but all expect the growth momentum will become stronger in the second half of the year.

Due to the summer vacation, rainy season and Ramadan, the third quarter is the traditional slack season for steel industry. However, iron ore price rallies recently, which brought the steady state of international steel price. Price offering from U.S. mills tend to increase by the growing demand in the U.S. market. In Europe, the historical low steel price forced E.U. mills to suspend operation, leaving no further room for downward price. Both market price and list price bottomed in China, showing recovery of market confidence. The impacts of the Japanese consumption tax hike are mitigating, and steel plants are more dominant about increasing price in both domestic and export. Overall, by the end of the slack season, global steel price might rebound following the restocking in downstream users.

Order receiving by downstream industries remains slow, and domestic market price stays weak. Considering the global economy and steel market became steady, the market outlook is more optimistic in the second half of the year than the first half. In order to boost purchase confidence in downstream industry, CSC has decided to keep all steel prices unchanged for September shipment.

• [Editor:Phillip.Feng]