15 June 2023 – Steel demand has picked up significantly since the beginning of June, as can be seen not only from falling inventories in China but also from significantly higher demand from India. And in the European Union, too, there are increasing voices that inventories are running low and that restocking can no longer be postponed. Expected interest rate pause of the U.S. Federal Reserve decided. And South Korean freight rates to the US and EU in May increased by 3%.
Chinese steel stocks down, India in buying mood, EU next?
Key carbon steel stocks in China have fallen by 4.1% since the beginning of June, indicating a trend reversal. There are also reports from manufacturing hub India of a switch to higher steel purchases. This is also reflected in the increasing imports of Chinese steel into India. In addition, steel demand is expected to grow by 7.5% in the current Indian fiscal year.
EU steel inventories lower than generally assumed?
As reported by various sources, the distributing, but also the steel processing industry is increasingly looking at significant changes in inventory levels, challenging the previous notion of high overstocks. So does also the car producers, where delivery times are now again on an uptrend and some optional equipments are not available due to raw material issues in the supply industry.
EU steel and stainless steel sector prepares for restocking
Market demand thus contradicts the notion of excess inventories, indicating a significant discrepancy between news reports and the actual inventory situation. Market participants are increasingly recognizing the growing need to restock as they become aware of the current scenario.
US Federal Reserve takes interest rate pause
The U.S. Federal Reserve unanimously decided yesterday not to raise key interest rates further for the time being, as expected. Even though there could be further interest rate hikes until the end of 2023, further decisions are to be data-driven. Overall, however, the Fed sees the United States on a good path toward its inflation target of around 2% a year.
Together with the decision of the Chinese central bank to lower interest rates, this should lead to positive impulses for the international markets overall.
Container freight rates to US and EU up in May
South Korean freight rates for outbound container shipping to key destinations, such as the United States and the European Union, experienced an increase in May compared to the previous month, as per the latest data released by the Korea Customs Service.
Container shipping costs up 3%
According to the data provided, the average cost of shipping a 40-foot container from Asia’s fourth-largest economy to the U.S. east coast reached US$3,877, reflecting a 3 percent rise compared to the previous month.
This notable increase in freight rates signifies the first month-on-month growth in 13 months.
- China cuts key interest rate, nickel price jumps upward
- Permit for US copper-nickel mine project withdrawn
- Japan’s economy surges with impressive momentum
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.