Global Steel Prices Weakened in March Owing to Surplus Inventories, Rising Chinese Exports, and Passive Demand

In March, the global steel market experienced a significant dip in prices. This decline was primarily driven by weak global demand, particularly in China, which is a major player in the steel industry. The slow economic recovery in various regions and reduced steel prices in China contributed to the downward pressure on prices.

The end of 2023 saw many deals for iron ore purchases in anticipation of a seasonal surge in steel demand from the construction sector in spring. However, this led to a substantial increase in imports in January and February, resulting in a buildup of stocks at ports. The expected demand surge did not materialize as anticipated, leading to a surplus of steel inventories by March. This oversupply, coupled with weak demand, led to a decline in steel prices globally.

The impact of low iron ore prices in China also played a significant role in the global steel market. Since many iron ore purchase contracts are linked to Chinese prices, the cost of steel production worldwide decreased due to the cheaper raw material. However, the weak demand for steel in China has led to an increase in steel exports from the country.

This trend, observed over the past three years, has intensified the pressure of cheap steel imports from China on other regions, including Asia, Europe, and the Americas. As a result, the global steel market faced downward price pressures in March, reflecting the challenges of oversupply and weak demand.

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According to Procurement Resource, global steel prices fell in March 2024 owing to weak demand, especially in China. Low iron ore prices in China reduced production costs worldwide, but sluggish demand led to increased Chinese steel exports. This trend has put pressure on other regions, causing a drop in global steel prices. The end of 2023 saw many iron ore purchases, but the anticipated demand surge didn't materialize, leading to a surplus of steel inventories. Hence, the steel market is struggling with oversupply and weak demand.