Chinese steelmakers raise November steel prices on SHFE rally, improved demand

Baoshan Iron & Steel (Baosteel), which is the main listed subsidiary of the world’s largest steelmaker China Baowu Steel Group, will increase its base prices for most flat steel products by 400-550 yuan per tonne, the company said on its WeChat account on Thursday.

It is raising prices for hot-rolled coil and sheet, up by 500 yuan per tonne from October, for domestic sales in November, after cutting prices by a total amount of 200 yuan per tonne from July to October.

Prices for heavy plate and pickled products would also be increased by 500 yuan per tonne in November, while those for cold-rolled products, hot-dipped galvanized (HDG) coil, electro-galvanized products (except for CQ-grade products), and materials with a mid-grade aluminium zinc-aluminium magnesium coating, would be increased by 550 yuan per tonne, according to Baosteel.

Baosteel is increasing its prices for CQ-grade electro-galvanized steel, pre-painted steel, aluzinc-coated coil and sheet (Galvalume), materials with a high-grade aluminium zinc-aluminium magnesium coating, and non-oriented electrical steel, by 400 yuan per tonne.

The steel giant is keeping prices for grain-oriented electrical steel unchanged in November after increasing by between 100-1,000 yuan per tonne for domestic sales in October.

Angang, Bengang also raise prices

Two other major mills in China – Anshan Iron & Steel (Angang) and Benxi Iron & Steel (Bengang) – also announced on Thursday, increases of 300-600 yuan per tonne to prices for their major steel products in November.

The two mills will increase their prices for HRC, heavy plate, pickled products, CRC products (except for automative products), CR full-hard coil, HDG, non-oriented electrical steel, wire rod, rebar, and special steel by 500 yuan per tonne for November’s domestic sales.

Their prices for pre-painted steel and seamless tube and pipe would be increased by 350 yuan per tonne, while those for electro-galvanized products would be raised by 300 yuan per tonne.

Angang and Bengang will raise their prices for CRC for automative use by 600 yuan per tonne for November.

Shanghai steel futures surge on China’s stimulus

The price hikes by these Chinese mills come on the back of the rally in steel prices on the Shanghai Futures Exchange (SHFE), following China’s latest stimulus blitz in late September, which improved market sentiment significantly, an industry analyst in Shanghai told Fastmarkets.

The most-traded SHFE HRC contract hit an over-four-month high of 3,900 yuan per tonne shortly after trading resumed on Tuesday October 8 – the first trading day after the Golden Week holiday from October 1-7 – before giving up some ground to end at 3,578 yuan per tonne on Thursday.

Fastmarkets’ price assessment for steel hot-rolled coil domestic, ex-whs Eastern China came in at 3,630 yuan ($513) per tonne at the midpoint on September 30, which marked the highest level since mid-July, before slipping to 3,575 yuan per tonne on Thursday.

Demand improves on stimulus measures

Chinese mills have also been encouraged to raise their prices for November sales on the back of a substantial improvement in orders from downstream users and higher morale among market participants following the SHFE rally, the Shanghai-based industry analyst said.

Downstream users, especially the consumers of CR steel products, became keener to replenish their stocks of raw materials, given the low inventories and improved orders, which were largely thanks to government subsidies which kicked in from August – for consumer goods such as home appliances and cars, and increased expectations for more expensive steel prices, the Shanghai-based analyst added.

Weakening in export orders

But there are concerns among market participants over the magnitude and sustainability of the latest uptick in steel consumption because the higher prices have reduced the appeal of Chinese materials to almost zero across the export markets, sources said.

The loss of export demand could take a toll on China’s steel market, given that positive export demand had helped to underpin Chinese steel prices earlier this year, according to a second industry analyst in Shanghai.

China exported 70.58 million tonnes of finished steel in the first eight months of 2024, up by 20.6% year on year from 58.54 million tonnes in the same period of last year, according to Chinese customs data published on September 10.

Looking ahead, uncertainty surrounding the improvement in steel demand and a potential ramp-up in supply after mill margins improve on higher steel prices, could exert downward pressure on Chinese steel prices, the second Shanghai-based industry analyst said.

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