International Long Product Market Analysis

摘要

We believe the rebate cuts will help redirect Chinese steel productiontowards higher-value steel goods (further downstream), which willhelp cap total finished steel export levels for this year – at least untilChinese producers are able to produce and sell more higher-valuesteel. On aggregate, given that a substantial disincentive has beenintroduced, we believe that Chinese bar and rod suppliers will begin toexperience diminishing returns, whether in terms of volumes exportedor margins achieved (Chinese suppliers internalising the full rebatecancellation will only be able to operate at a loss for a limited period oftime). At the same time, competition among bar and rod suppliers inthe domestic market will increase, removing support from prices.