1. Global steel production decreased by 1
Global steel production decreased by 1.6% to 141 million metric tons in June 2017 from 143 million metric tons in May o Global production in June 2017 increased 3.2% from one year ago. o Total world crude steel production in 2016 increased slightly by 0.7% from the 2015 level of 1.6 million metric tons. o China’s June 2017 production level increased by 1.3% from May 2017 to 73 million metric tons. o China’s total production in 2016 amounted to million metric tons, a 1.2% increase from the previous year. o The European Union 28 remains the second largest producer, behind China, with June 2017 production level of 14.4 million metric tons, a 2.5% decrease from 14.8 million metric tons in May 2017
China’s share of total monthly world steel production increased to 52% in June 2017, accounting for slightly more than half of monthly total world production, while the U.S. ranked fifth behind India at 5%. China’s share is larger than the combined production of the U.S., the EU 28, Russia, and Japan, which historically were the largest producers of steel

2. STEEL AND ALUMINUM PRICES STILL RISING, BUT LONG-RUN FORECAST IS TAME
Steel prices in China increased in June-July on a month on month basis as the Chinese government undertook cuts to rein in oversupply as well as to curb air pollution. The largest producing country in the world is also expected to cut output during winter in its aim to check air pollution, leading to a stability in prices in the near term
“Chinese supply side reform, leading to lower exports at higher prices, has done far more to buoy global steel markets than Trump or any other Western politician could achieve” - Jefferies International 
The rebound in China’s property market coupled with the government’s policy of cutting excess steel capacity helped fuel a rally in Chinese steel prices. As Chinese steel prices rose, we saw a global rally in steel prices.
On an annual percent change basis, U.S. cold-rolled steel sheet/strip prices were up about 15 percent as of May Hot-rolled sheet/strip was not far behind, growing at a 13 percent rate. Steel prices started rising in the second quarter of 2016 on a month-to-month basis, and the growth rate accelerated significantly in the first quarter of this year.
The U.S. wasn’t the only nation seeing increased steel prices in the first quarter of 2017 — countries all over the world experienced it as well. This is primarily attributed to a substantial increase in demand to support renewed growth in China’s manufacturing and construction sectors. Iron ore prices rose even faster as a result of low stocks in China.

3. broadly steady steel demand in the region
Impact of China
(Demand has been better than expected in China.China’s supply-side reforms are supporting steel prices)
broadly steady steel demand in the region
The outlook for Asian steel producers is forecast to improve over the next year
Moody’s has upgraded its forecast for the sector’s profitability from negative to stable, following a significant improvement in performance starting late in 2016 and continuing this year.
Steel performance in Asia: Moody's upgrades Asia steel industry outlook to stable from negative
Demand
We did see some moderation in Chinese steel demand over the last couple of years, primarily led by the slowdown in construction activity. However, the country’s construction activity has been unexpectedly strong this year. China’s car sales have also continued to grow despite the sales tax hike that came into effect at the beginning of the year.
The removal of excess steel-production capacity in China
While China plans to cut its excess steel capacity, its steel production hasn’t shown any signs of a slowdown. Forget a decline; we’ve actually seen an increase in Chinese steel production this year, with April steel production hitting a fresh monthly high.
Moody's notes that China's capacity will continue declining because the government's supply-side reforms and environmental protection measures are forcing inefficient mills to close and major producers to merge.
Asian steel demand will also remain stable with robust growth in South and Southeast Asia, alongside GDP growth, and stable demand in China. 

4. 2H2017:World Bank expects iron ore/steel prices to fall driven by
Construction boom in China peaked, which means the country that accounted for more than 50 percent of the increase in steel demand over the last 15 years will not have the same impact on global steel prices going forward.
Steel futures prices started falling in April as it became apparent that iron ore inventories were accumulating at Chinese ports, which signaled the restocking was done. Australian and Brazilian exports of iron ore reached record levels in the first quarter, but the rise in price led to the reopening of closed Chinese plants. Brazil is bringing additional capacity online, and India’s steel industry is becoming more productive. In sum, lower Chinese demand and higher global production should put downward pressure on steel prices through 2025
Steel prices will likely keep rising in the second half of this year, but if the rate of increase decelerates in the third quarter, it will signal an accurate World Bank forecast, which means prices could fall again by 2018.
Vietnam: VDS-Sectorreport-SteelIndustryReview_Optimistic2017Outlook.pdf

5. Steel performance in Vietnam
the strong pipeline of infrastructure investment will continue to underpin material prices in the coming months
Higher steel prices lead to better profits for the steel industry but also result in higher costs for sectors that use steel as a raw material. For the steel industry, higher steel prices translate to stronger earnings, and a recovery after China’s economic slowdown last year led to a sharp correction in global commodities. Chinese steel producers also stand to benefit from rising margins between steel prices and raw material costs such as iron ore and coking coal.
Steel performance in Asia
The outlook for Asian steel producers is forecast to improve over the next year.
Moody’s has upgraded its forecast for the sector’s profitability from negative to stable, following a significant improvement in performance starting late in 2016 and continuing this year.
This includes steel giants such as China’s Baowu, South Korea’s Posco and Japan’s Nippon Steel.
The removal of excess steel-production capacity in China
broadly steady steel demand in the region
The outlook for Asian steel producers is forecast to improve over the next year
Moody’s has upgraded its forecast for the sector’s profitability from negative to stable, following a significant improvement in performance starting late in 2016 and continuing this year.
Since bottoming out in 2015, thanks to a recovery in industry fundamentals in China, with apparent demand — production less net exports — growing 2.3 per cent in 2016, as well as production capacity being cut by more than expected.
- Inefficient mills are being forced to close in China and major producers are being required to merge, some of the capacity reduction to environmental measures — causing output capacity to keep falling over the year ahead.
Steel performance in Vietnam

6. steel price forecast
2H2017:World Bank expects iron ore/steel prices to fall driven by
Construction boom in China peaked, which means the country that accounted for more than 50 percent of the increase in steel demand over the last 15 years will not have the same impact on global steel prices going forward.
Steel futures prices started falling in April as it became apparent that iron ore inventories were accumulating at Chinese ports, which signaled the restocking was done. Australian and Brazilian exports of iron ore reached record levels in the first quarter, but the rise in price led to the reopening of closed Chinese plants. Brazil is bringing additional capacity online, and India’s steel industry is becoming more productive. In sum, lower Chinese demand and higher global production should put downward pressure on steel prices through 2025
Steel prices will likely keep rising in the second half of this year, but if the rate of increase decelerates in the third quarter, it will signal an accurate World Bank forecast, which means prices could fall again by 2018.
Vietnam: VDS-Sectorreport-SteelIndustryReview_Optimistic2017Outlook.pdf
World Bank expects iron ore/steel prices to fall in the second half of this year for a number of reasons. First and foremost, it thinks the construction boom in China peaked, which means the country that accounted for more than 50 percent of the increase in steel demand over the last 15 years will not have the same impact on global steel prices going forward.
Steel futures prices started falling in April as it became apparent that iron ore inventories were accumulating at Chinese ports, which signaled the restocking was done. Australian and Brazilian exports of iron ore reached record levels in the first quarter, but the rise in price led to the reopening of closed Chinese plants. Brazil is bringing additional capacity online, and India’s steel industry is becoming more productive. In sum, lower Chinese demand and higher global production should put downward pressure on steel prices through 2025.
It remains to be seen what the effect of economic growth in the European Union and U.S. will be. World Bank believes any increase in demand in the world’s two largest economies will not outweigh the decline in demand from China. Indian economic growth will also be a factor.
As of June, steel prices were still increasing in the U.S., which will continue to be an issue for the work truck industry. Steel prices will likely keep rising in the second half of this year, but if the rate of increase decelerates in the third quarter, it will signal an accurate World Bank forecast, which means prices could fall again by 2018.

7. Steel price in China
Chinese steel prices are falling this week after spiking to record highs last week
But given the series of curbs introduced over the last few days, analysts said they expect more action to come from authorities and for the current pricing downtrend to continue in steel, impacting other commodities
Chinese steel has rallied steadily this year, but high trading volume and a recent price surge has worried authorities. Increased oversight on the metal underscores Beijing's priority to maintain market stability in a sensitive political year, and its continued efforts to iron out the country's history of boom-and-bust cycles in commodities trading. China is both the world's largest producer and consumer of steel, so price fluctuations can hit the world's second-largest economy on all sides.