Fitch Solutions Macro Research on Tuesday said it has revised downwards its 2019 global steel price forecast as global prices continue to be hammered by poor sentiment amid ongoing US-China trade tensions and increasing downside risks to the global economy.
In the long term, Fitch Solutions maintains its view that prices will ease and embark on a multi-year declining track as fundamentals loosen with falling demand and increasing production.
"We are revising down our 2019 global steel price forecast from an average of $650/tonne to $600/tonne, as prolonged weak investor sentiment on the back of the ongoing trade tensions between the US and China and increasing downside risks to the global economy continues to pressure prices," Fitch Solutions Macro Research said in a statement.
In terms of fundamental factors, in China, while demand from infrastructure and construction sectors proved exceptionally strong in the year to date as targeted stimulus measures take effect, steel production has also soared, loosening the market, it said.
"We believe Chinese steel demand growth has further room to run, with infrastructure projects starting construction and further stimulus from the government likely in the face of escalating tensions with the US, which will prevent a collapse in the global average," it said.