China's balancing act in supporting steel demand on one side and curbing output on the other may determine the fortunes of regional markets this winter.
Its looming step onto the highwire comes after China single-handedly held up global steel prices with its rare buying spree in summer and autumn.
Winter sees a number of seasonal factors come into play in China, like softer construction demand, mandated steel output cuts to combat pollution and, at its tail end, restocking ahead of the Lunar New Year, which falls on Feb. 12 in 2021.
The seasonal effect on steel prices has likely been overstated in recent years, an analysis of China's hot rolled coil and billet prices over the autumn and winter quarters of the past five years shows.
The average price of HRC on an ex-stock Shanghai basis in the winter months of November-January rose in three and fell in two of the past five years compared with autumn's August-October, S&P Global Platts data showed. In Tangshan billet winter prices fell in three years and rose in two.
