Steel prices in China were higher Monday, boosted by the expectations that the Chinese government would really turn up the heat on domestic steel producers in the second half of the year to cut steel output and trim the country’s overcapacity problem.
While steel prices have already staged a recovery in 2016, there are concerns over the sustainability of this recovery, as global overcapacity at the steel market remains a big problem, with China the largest concern. As long as overcapacity concerns remain, they will remain a dark cloud hanging over the market. On Monday, January rebar on the Shanghai Futures Exchange climbed 1.4% to 2,575 yuan.
The steel market has been impacted by unfair trading and selling practices, around the world. While the focus has been on China, it is not the only region of the world dealing with unfair market practices. On Monday, South Africa’s competition watchdog slapped a $110-million fine on ArcelorMittal for price fixing. The country’s competition commission launched a probe into steel producers in the country in 2008 following concerns around high steel prices. The investigation found that the company colluded with its competitors in “fixing” prices and allocating customers. The company admits its involvement in the long steel and scrap metal cartels, and agrees to pay the penalty. ArcelorMittal South Africa is Africa’s largest steel producer.
Meanwhile, on Monday, The Canada Border Services Agency announced that it has launched an anti-dumping investigation into concrete reinforcing bar, or rebar, shipped into Canada from several areas of Europe and Asia.
SOurce: Economic Calender