Steel, The Number One China Indicator, Is In Deep Trouble

(Business Insider) China’s Baoshan Iron & Steel (60019 CH), the largest listed steelmaker, has cut its steel prices for the first time in eight months.
You know demand has to be pretty weak for them to cut prices, since they’re being squeezed from the cost side due to higher iron ore prices at the same time.
China Daily: “Some steel producers are already tottering on the brink of losses. They will have to make output cutbacks or resort to maintenance shutdowns, if the prices continue to fall,” said Zhang Lin, an analyst with the Beijing-based Lange Steel Information Research Center.
Baosteel cut prices of hot-rolled products for July by 300 yuan ($44) per ton and cold rolled prices by 500 yuan per ton.
“We’ve seen orders dwindling in downstream sectors like auto, shipping, home appliances and property,” said Zhang.
Chinese mills across the board have reportedly cut prices in June. We can’t think of a better indicator for a China slow-down than steel demand.
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