Steel prices in Europe have dropped 14 per cent since the start of the year against a backdrop of falling demand in China, the world’s largest consumer.
According to Mintec, the European steel price for cold rolled coil fell from $727 per tonne (£461) in January to $625 (£396) in October.
Growth in China fell to 7.3 per cent in the third quarter of 2014, the slowest pace since 2009. At the same time steel production in China increased 1 per cent year-on-year to 68.9 million tonnes in August "increasing supply in the market and further suppressing prices”.
Loraine Hudson, market analyst at Mintec, said: “The Chinese steel market is having a significant impact on the world market, as it is by far the largest producer and consumer of steel. The Chinese market has witnessed overcapacity in the steel sector, resulting in steel prices dropping domestically. Despite weak demand growth, production has been increasing throughout most of this year.
“Lower domestic prices in China and weaker demand result in higher availability of steel in the global market, putting a downward pressure on prices in the EU and US.”
Steel prices in China have fallen from $607 per tonne (£385) in January to $542 (£344) in October. In the US the price has dropped from $861 (£546) to $839 (£532) over the same period.