In December 2024, steel prices did not continue the downward trend since October 2024 and began to stabilize and stop falling. Under the combined influence of multiple factors such as the further interest rate cut by the Federal Reserve, the policy expectations of the Central Economic Work Conference, the contraction of steel supply from steel mills, the increasingly obvious seasonal weakening of demand, and the continuous intensification of the winter storage competition, the domestic steel market price has shown a narrow range of fluctuations.

The domestic steel price index rose month-on-month

According to the monitoring of the China Iron and Steel Association, in December 2024, the average value of the China Steel Price Index (CSPI) was 97.73 points, rising by 0.16 points or 0.17% month-on-month, and falling by 14.88 points or 13.21% year-on-year. Among them, the average value of the CSPI long products index was 100.25 points, rising by 0.31 points month-on-month, with an increase of 0.31%, and decreasing by 15.90 points year-on-year, with a decrease of 13.69%. The average value of the sheet metal index was 95.96 points, rising by 0.20 points or 0.21% month-on-month, and falling by 15.25 points or 13.71% year-on-year.

As of the end of December 2024, the CSPI stood at 97.47 points, rising by 0.89 points or 0.92% month-on-month, down by 15.43 points or 13.67% compared to the end of 2023, and down by 15.43 points or 13.67% year-on-year.

From the perspective of the steel price operation throughout 2024, the average CSPI in 2024 was 102.47 points, a year-on-year decrease of 9.37 points, representing a decline of 8.38%. Looking at the situation on a monthly basis, steel prices dropped significantly from January to March 2024. They fluctuated upward from April to May. From June to July, they fell rapidly under the influence of factors such as market panic caused by the alternation of the old and new national standards for rebar and the off-season effect. From August to September, steel prices fluctuated. Affected by a series of incremental policies on September 26th, Steel prices rose strongly at the end of September. Entering October, steel prices returned to their fundamentals. From October to November, they fluctuated downward, and in December, they continued to fluctuate narrowly.

The prices of long products and plates both rose month-on-month, with the increase in long products being greater than that of plates.

As of the end of December 2024, the CSPI long Products Index stood at 100.22 points, rising by 1.71 points or 1.74% compared to November 2024. The CSPI sheet index stood at 95.55 points, rising by 0.49 points compared with the previous period, representing a growth rate of 0.52%. Compared with the same period in 2023, the CSPI long products and sheet indices decreased by 15.89 points and 16.25 points respectively, with declines of 13.69% and 14.53%.

Looking at the situation in 2024, the average value of the CSPI long products index in 2024 was 105.22 points, a year-on-year decrease of 10.20 points, representing a decline of 8.84%. The average value of the sheet metal index was 100.58 points, a year-on-year decrease of 11.29 points, representing a decline of 10.09%.

The prices of major steel varieties fluctuated.

In December 2024, among the eight major steel varieties monitored by the China Iron and Steel Association, the prices of the main steel varieties fluctuated. In December 2024, the average prices of medium and heavy plates, high wire rods and rebar rose steadily compared with November 2024. The prices of Angle steel and cold-rolled thin plates increased slightly, while the prices of galvanized sheets, hot-rolled coil and seamless pipes decreased slightly.

Looking at the overall situation in 2024, the average prices of the eight major steel varieties were all lower than those in 2023. Among them, the prices of medium and heavy plates, cold-rolled thin plates, Angle steel, hot-rolled coil plates, hot-rolled seamless tubes, high wire rods, rebar (threaded steel), and galvanized plates decreased by 431 yuan/ton, 388 yuan/ton, 384 yuan/ton, 357 yuan/ton, 341 yuan/ton, 340 yuan/ton, 329 yuan/ton, and 312 yuan/ton respectively.

Recently, the steel price index has stopped falling and started to rise.

Entering December 2024, the steel market has been fluctuating within a narrow range under the influence of strong expectations, weak reality and the winter storage game among steel traders. In early January this year, as the off-season deepened, the demand for steel accelerated its decline. The market remained in a pattern of strong supply and weak demand, with prices fluctuating and falling. In late January, as market sentiment improved, steel prices stopped falling and stabilized.

The steel price index in various regions rose and fell on a month-on-month basis.

By region, in December 2024, the average value of the CSPI national steel price index for the six major regions rose and fell month-on-month: the central and south region saw a significant increase, reaching 0.62%. The increase in North China was relatively small, at 0.44%. The increase rates in the southwest region and the northwest region were 0.45% and 0.46% respectively. The Northeast region and the East China region decreased slightly, with declines of 0.99% and 0.11% respectively.

In December 2024, the average price index of rebar in the western region (Shaanxi-Shanxi-Sichuan-Gansu Forum) was 3,416 yuan per ton, an increase of 16 yuan per ton compared with November 2024, representing a growth rate of 0.46%.

Looking at the full-year situation in 2024, prices in all six major regions have declined. The decline rates in East China, Northwest China, Central South China, North China, Southwest China, and Northeast China are 8.64%, 8.60%, 8.25%, 8.15%, 7.99%, and 7.36% respectively.

Analysis of Factors Affecting Steel Price Changes in the Domestic Market

The growth rate of investment in real estate and manufacturing declined, while the growth rate of infrastructure investment rose slightly.

According to data from the National Bureau of Statistics, in 2024, the national fixed asset investment (excluding rural households) increased by 3.2% year-on-year, with the growth rate continuing to decline slightly by 0.1 percentage point, marking the second consecutive month of decline. Among them, infrastructure investment increased by 4.4% year-on-year, with the growth rate rising slightly by 0.2 percentage points. Investment in manufacturing increased by 9.2% year-on-year, with the growth rate dropping by 0.1 percentage point. In December 2024, the manufacturing Purchasing Managers' Index (PMI) stood at 50.1%, down 0.2 percentage points from November 2024. However, it has remained above the critical point for three consecutive months, indicating that the manufacturing sector continues to expand. The monthly production and sales of automobiles continued to remain at a relatively high level. In December 2024, the production and sales of automobiles reached 3.366 million and 3.489 million units respectively. The production volume decreased by 2% month-on-month, while the sales volume increased by 5.2% month-on-month, and rose by 9.3% and 10.5% year-on-year respectively.

In 2024, the added value of industrial enterprises above designated size increased by 5.8% year-on-year, with the growth rate remaining the same as that from January to November 2024. In 2024, the cumulative year-on-year decline in real estate development investment was 10.6%, with the decline rate continuing to expand by 0.2 percentage points. The decline rate has been expanding for three consecutive months. The area of new housing starts decreased by 23.0%, with the decline rate remaining the same as that from January to November 2024. Overall, under the influence of various policies, the real estate market witnessed an increase in positive changes in December 2024. Market transactions became more active and prices stabilized, leading to an improvement in market expectations. The future trend is expected to continue to improve. Coupled with the recent intensified efforts by the state to stabilize the real estate market, it is anticipated that the real estate market will stabilize in 2025.

The decline in domestic apparent consumption of crude steel was significantly greater than that in production.

According to data from the National Bureau of Statistics, in December 2024, the national crude steel production was 75.97 million tons, up 11.8% year-on-year, with a daily output of 2.4506 million tons, down 6.2% month-on-month. The production of pig iron reached 66.7 million tons, increasing by 9.4% year-on-year. Steel production reached 119.1 million tons, increasing by 7.1% year-on-year. In 2024, the output of crude steel was 1,005.09 million tons, a year-on-year decrease of 1.7%.

From the perspective of imports and exports, in December 2024, both the export volume and price of steel in China rose, while the import volume increased but the price dropped. Specifically, in December 2024, China's steel exports reached 9.727 million tons, an increase of 449,000 tons compared with the previous month, representing a growth rate of 4.8%. The average price was 732.9 US dollars per ton, increasing by 15.1 US dollars per ton compared with the previous period, with a growth rate of 2.1%. In 2024, China's cumulative steel exports reached 110.716 million tons, an increase of 20.452 million tons compared with the previous year, representing a growth rate of 22.7%. The average export price was 755.4 US dollars per ton, a decrease of 19.3% compared with the previous year.

In December 2024, China imported 621,000 tons of steel, an increase of 148,000 tons compared with the previous month, representing a growth rate of 31.3%. The average price was 1,643.6 US dollars per ton, a decrease of 181.1 US dollars per ton compared with the previous period, representing a decline of 9.9%. In 2024, China's cumulative steel imports reached 6.815 million tons, a decrease of 830,000 tons compared with the previous year, representing a decline of 10.9%. The average import price was 1,688.5 US dollars per ton, up 1.8% year-on-year.

Based on this calculation, in December 2024, the national apparent consumption of crude steel was 65.33 million tons (excluding steel billets), representing a year-on-year increase of 7.6%. In 2024, the national apparent consumption of crude steel was 889.79 million tons (excluding billets), a decrease of 44.77 million tons compared with the previous year, representing a year-on-year decline of 4.8%. In 2024, the decline in crude steel output was significantly smaller than that in apparent consumption, and the contradiction of oversupply remained prominent.

The prices of raw materials and fuels fluctuated, with the price of iron ore rising slightly.

From the perspective of raw materials and fuels, compared with November 2024, the average prices of various types of major raw materials and fuels in December 2024 fluctuated. Among them, the price of iron ore rose slightly by 1.84%, while the prices of other varieties all declined.

The price of steel in the international market continues to decline

In December 2024, the CRU International Steel Price Index stood at 180.6 points, a decrease of 3.3 points or 1.8% month-on-month, and a decline of 38.1 points or 17.4% year-on-year. The decline continued to expand.

The average value of the CRU International Steel Price Index in 2024 was 197.5 points, a year-on-year decrease of 22.5 points, representing a decline of 10.21%.

The prices of both long products and plates have dropped, with the decline in long products being greater than that in plates.

In December 2024, the CRU long products index stood at 196.2 points, a decrease of 5.3 points compared with the previous month, representing a decline of 2.6%. The CRU sheet index was 172.8 points, a decrease of 2.4 points compared with the previous period, representing a decline of 1.4%. Compared with the same period in 2023, the CRU long product index decreased by 17.6 points, representing a decline of 8.2%. The CRU sheet index dropped by 48.3 points, a decrease of 21.8%.

In 2024, the average value of the CRU long product index was 205.8 points, a year-on-year decrease of 19.1 points, representing a decline of 8.48%. The average CRU sheet index was 193.4 points, a year-on-year decrease of 22.2 points, representing a decline of 10.31%.

The steel price indices in Europe, North America and Asia all declined.

The North American market

In December 2024, the CRU North American Steel Price Index stood at 203.0 points, down 2.7 points from the previous month, representing a decline of 1.3%. The manufacturing PMI of the United States was 49.3%, rising by 0.9 percentage points month-on-month, but still in the contraction zone. In December 2024, steel prices at steel mills in the Midwestern United States mainly declined. Except for wire rods which rose significantly and small sections and section steel which remained unchanged compared with the previous month, all other prices dropped.

The European market

In December 2024, the CRU European Steel Price Index stood at 201.7 points, a decrease of 3.2 points or 1.6% compared with the previous month. The final reading of the Eurozone manufacturing PMI in December 2024 was 45.1%, down 0.1 percentage point from November 2024. Since the second half of 2022, the index has remained below the boom-bust line, indicating that economic activity in the eurozone is contracting. In December 2024, the manufacturing PMI of Germany, Italy, France and Spain were 42.5%, 46.2%, 41.9% and 53.3% respectively. Among them, the manufacturing PMI of Germany and France declined month-on-month, while that of Italy and Spain rose month-on-month. In December 2024, the prices of all steel varieties in the German market declined, with steel bars experiencing a significant drop of 5.21%. The decline in hot-dip galvanized steel sheets was relatively small, at 1.18%.

The Asian market

In December 2024, the CRU Asia Steel Price Index stood at 155.7 points, down 3.8 points from November 2024, representing a decline of 2.4%, with prices continuing to fall. The manufacturing PMI of Japan was 49.6%, rising by 0.6 percentage points month-on-month. The manufacturing PMI of South Korea was 49%, down 1.6 percentage points month-on-month. The manufacturing PMI of India was 56.4%, down 0.1 percentage point from the previous period. China's manufacturing PMI stood at 50.1%, down 0.2 percentage points month-on-month. In December 2024, the prices of all steel varieties in the Indian market declined. Hot-rolled coil, cold-rolled coil and hot-dip galvanized sheet saw slight drops, while the prices of the rest remained stable with a slight decline.

Analysis of the price trend of steel in the later period

From the perspective of the macroeconomic situation, the momentum of global economic recovery is weakening in 2024. China is confronted with a situation of insufficient effective demand, and the economy is facing considerable downward pressure.

The Central Economic Work Conference of the Communist Party of China held in December 2024 pointed out that in 2025, a more proactive fiscal policy should be implemented, the fiscal deficit ratio should be raised, and the fiscal policy should be sustained and more effective. A moderately loose monetary policy should be implemented, with timely cuts in the reserve requirement ratio and interest rates to maintain ample liquidity. The long-standing expression of "proactive fiscal policy + prudent monetary policy" has been transformed into "more proactive + moderately loose" at this Central Economic Work Conference, sending out a positive signal that the expansion space for macro policies has been opened up. From this, it can be known that in 2025, macro policies will also be mainly characterized by easing, and expanding domestic demand will be an important means to stabilize the economy.

On December 27, 2024, the Monetary Policy Committee of the People's Bank of China held its regular meeting for the fourth quarter of 2024. The meeting studied the main ideas for the next stage of monetary policy. It was mentioned that it is suggested to increase the intensity of monetary policy regulation and, based on the domestic and international economic and financial situation and the operation of the financial market, cut the reserve requirement ratio and interest rates at an appropriate time.

From January 3rd to 4th, 2025, the 2025 People's Bank of China Work Conference once again mentioned "choosing an appropriate time to cut the reserve requirement ratio and interest rates". It is expected that the reserve requirement ratio and interest rates will be cut at an appropriate time in the first quarter of 2025 to provide more financial support for the real economy.

Fiscal policy will be effectively intensified to safeguard economic stability. In the later period, macroeconomic policies will still provide support for steel prices.

Under the background of loose supply of raw materials and fuels, the price of steel is still mainly influenced by both the supply and demand sides of the market. Supply remains the key factor determining the trend of steel prices in the later period. From the perspective of inventory, in the first ten days of January, the daily output of crude steel increased significantly. The average daily output of crude steel by key steel enterprises was 2.065 million tons, rising by 10.3% month-on-month and 4.2% year-on-year.

As the off-season effect continues and demand gradually weakens, inventory shows an upward trend. From the perspective of enterprise inventories, in the first ten days of January, the steel inventory of key statistical steel enterprises was 12.59 million tons, an increase of 220,000 tons compared with the previous ten days, representing a growth of 1.8%. It increased by 220,000 tons compared with the beginning of this year, growing by 1.8%. It decreased by 1.59 million tons compared with the same period in December 2024, representing a decline of 11.2%. It decreased by 1.8 million tons compared with the same period in 2024, representing a decline of 12.5%. In the first ten days of January, the social inventory of five major types of steel in 21 cities was 6.63 million tons, an increase of 40,000 tons compared with the previous period, rising by 0.6%. The inventory fluctuated at a low level. Compared with the same period in 2024, it decreased by 1.18 million tons, a decline of 13.9%, but the current key steel enterprises' steel