Because the Chinese government has vigorously cleared excess production capacity. Steel prices have been remaining at a very high level for the past 3 years. However, in November 2019, China’s steel price drops for the first time. Taking the cold-rolled steel used in our steel raised floor as an example, the price has dropped by about 15% so far.
In the past 3 years, high price of Chinese steel has slowed downstream demand and exports. At the same time, under the stimulation of high profits, the continuous expansion of steel industry has also accelerated the decline in steel prices. In addition, since November, the Chinese government has increased the export tax rebate rate for all products. Moreover, the steel price drops. It is believed to have a positive impact on export-oriented companies.