China and India to Support Raw Material Prices in the Second Half of the Year

India Raw Material

Stanislav Zinchenko, CEO of Ukrainian market research firm GMK, stated at the 'Kallanish Europe Steel Markets 2024 Conference' held in Milan, Italy, in the second week of June, "Raw material prices will be supported by demand from China and India in the second half of this year."

According to Zinchenko, activity in China's steel demand industries has remained consistent with last year, helping to sustain steel production levels. Although the domestic real estate sector is facing a crisis, other sectors such as manufacturing are helping to offset this.

From January to April, China's steel consumption decreased by 7.1% year-on-year, and the average daily transaction volume in May fell by 5.6%. The weak consumption and sales in the first half indicate that China may increase production and steel consumption in the second half. The average blast furnace operating rate in China rose significantly to 89.5% in May from 86.7% in April.

In India, infrastructure projects will help support raw material prices in the second half of the year. In April, India's nominal steel consumption increased by 9.4% year-on-year, and the price of hot-rolled steel in May rose by $35 per ton compared to the same month last year.

India's steel demand was weak during the general election period, but now that the elections are over, demand is expected to increase due to infrastructure financing. Seasonal factors also need to be considered. Steel demand in India typically slows down during the monsoon season from June to September but generally strengthens in the second half of the year.