The exchanges between steel bodies from China and Japan signified that global soaring prices of the raw material could be restrained to some extent and a more reasonable pricing mechanism may be established to address strained supply chains, experts have said. The remarks followed Luo Tiejun, vice president of China Iron and Steel Association (CISA) .
China’s steel exports are expected to drop as the country’s government takes a series of actions to stem the unusual spike of bulk commodity inflation. However, experts say that while the restrictions will dampen the business of Chinese steel exporters, it is unlikely to ripple across the international market due to China’s limited annual exports. .
China’s steel sector returning to normal
Chinese steel-related companies are adjusting their businesses as prices return to normal, after a government crackdown on speculation in the market for much-needed materials for factories.
In respond to the months-long price jump for bulk commodities such as iron ore, China’s top economic planner announced on Tuesday an action plan for strengthening price mechanism reform during the 14th Five-Year Plan period (2021-25).
The plan highlights the need to respond appropriately to price fluctuations for iron ore, copper, corn and other bulk commodities.
Driven by the release of the new action plan, rebar futures fell 0.69 percent to 4,919 yuan ($767.8) per ton on Tuesday. Iron ore futures fell 0.05 percent to 1,058 yuan, signaling a reduction in volatility after a slump triggered by the government’s crackdown.
China s steel exports are expected to drop as the country s government takes a series of actions to stem the unusual spike of bulk commodity inflation. However, experts say that while the restrictions will dampen the business of Chinese steel exporters, it is unlikely to ripple across the international market due to China s limited annual exports.
Australian iron ore could be the next item to feel the pinch of sour relations
Chinese industry participants are diversifying their sources of bulk commodities in an attempt to cut reliance on Australian imports, in the wake of rising trade tensions ignited by the Morrison administration’s hostile policy toward China.
Industry experts said that Australian iron ore could be the next item to get embroiled in the diplomatic spat. Australian coal exports to China have fallen sharply since last year.
On Monday, the average price of 20-millimeter third-grade rebar on the market reached 5,168 yuan ($803.93) per ton, down 87 yuan per ton from April 30, according to MySteel monitoring, amid the tightened regulations on bulk commodities and other factors.