BEIJING : China's first-quarter steel demand grew 1.9 per cent from a year earlier, more than expected, an industry group said on Wednesday, countering market views that weak demand has been a key reason for falling prices.
Apparent steel consumption reached 243.42 million tonnes during the first three months, officials from the China Iron and Steel Association said in a quarterly briefing, as the world's No. 2 economy lifted tough COVID curbs that had hampered construction activity. "The demand is better than we had expected; previously we thought it would be flat on year but it posted some growth in the end," said Wang Yingsheng, CISA chief economist.Steel output rose 6.1 per cent versus a year ago to 261.56 million tonnes, according to government data released earlier this month, after mills ramped up production in anticipation of much more robust demand.
Rebar on the Shanghai Futures Exchange has dropped nearly 10 per cent since late March to 3,719 yuan a tonne on Wednesday. "The main problem comes from the supply side," said Wang, adding that traders and end-users tend to take a watchful stance in the face of a weakening market, exacerbating falling prices.The government-backed association on Monday urged domestic steelmakers to cut production to ensure stable cash flow.