Steel Billet Prices Drop by RMB 40, Steel Prices May Continue to Weaken

Summary of Spot and Futures Prices of Steel Products

On April 9, the domestic steel market experienced a weak performance. The ex-factory tax-inclusive price of ordinary square billets in Qian’an, Tangshan, dropped by RMB 40 to RMB 2,930 per ton. In terms of transactions, the domestic spot market slightly loosened in the morning, and the futures prices for rebar rebounded from the bottom in the afternoon, stabilizing low-priced resources in some cities. Merchants reported an overall improvement in transactions compared to the previous day.

On April 9, the closing price of the main rebar futures contract was 3,088, down by 1.37%. Both the DIF and DEA lines moved downwards, and the RSI three-line indicator was between 26-40, operating between the middle and lower Bollinger Bands.

On April 9, five steel mills lowered their building materials prices by RMB 20-60 per ton.

Daily Price Trends of Various Steel Products

Rebar: On April 9, the average price of 20mm Grade 3 earthquake-resistant rebar in 31 major cities across the country was RMB 3,265 per ton, down by RMB 22 per ton from the previous trading day. Recently, the futures market has performed poorly, and market sentiment has been pessimistic, significantly impacting the spot market driven by sentiment. Therefore, it is expected that the domestic construction steel prices may continue to weaken on April 10, with the decline slowing down.

Hot-rolled Coil: On April 9, the average price of 4.75mm hot-rolled coil in 24 major cities across the country was RMB 3,318 per ton, down by RMB 22 per ton from the previous trading day. Recently, the iron output of steel mills has slightly increased, and steel production has continued to increase, maintaining supply pressure, while demand has begun to weaken, changing the supply-demand balance. Hot-rolled coil prices may continue to be under pressure, and it is expected that hot-rolled coil prices may fluctuate narrowly on April 10.

Cold-rolled Coil: On April 9, the average price of 1.0mm cold-rolled coil in 24 major cities across the country was RMB 4,062 per ton, down by RMB 23 per ton from the previous trading day. Due to the relatively larger profit margin of cold-rolled steel compared to other varieties in the early stage, the decline has been larger. On the other hand, it is also due to weak demand and unchanged supply output. Both state-owned and private resource customers have been affected by the continuous decline in futures prices, lowering their quotes and holding a cautious and pessimistic attitude towards the future market. Overall, it is expected that cold-rolled prices may continue to weaken on April 10.

Medium and Heavy Plate: On April 9, the average price of 20mm ordinary plate in 24 major cities across the country was RMB 3,526 per ton, down by RMB 10 per ton from the previous trading day. In the Central China region, although most medium and heavy plate steel mills have recently offered discounts for shipments, the overall market arrival volume has not changed significantly as traders have gradually received goods locked in through one-by-one negotiations in the early stage. Currently, the sentiment of price declines mostly comes from macro and market factors, and it is expected that the price center of medium and heavy plates may still have downward space on April 10, with merchants generally holding a weak confidence in the future market.

Daily Price Trends of Raw Materials and Fuels

Iron Ore: On April 9, the price of imported iron ore at Shandong ports weakened compared to the previous working day, with a cumulative decline of RMB 4-6. Traders in the region were less active in quoting, and few transactions had been concluded as of now. The trading sentiment in the Shandong forward market was relatively weak. On the buying side, steel mills in the region mostly maintained low inventory operations, with weak inquiries. Currently, the mainstream price of PB fines is around RMB 740-742; the mainstream price of super special fines is around RMB 600-605; and the mainstream price of PB lumps is around RMB 880.

Scrap Steel: On April 9, the average price of scrap steel in 45 major markets across the country was RMB 2,048 per ton, down by RMB 22 per ton from the previous trading day. The procurement prices of most steel mills slightly decreased, and the arrival volume of leading steel enterprises was around 13,000 tons, basically in line with daily consumption. Base prices slightly decreased, and market transactions were average. Currently, the overall market inventory is at a medium-low level, with active shipments as the main focus, and scrap steel prices are under downward pressure in the short term.

Coke: On April 9, the coke market price remained stable. On the demand side, the destocking momentum of finished steel products weakened, and steel mills producing construction steel were still in the process of resuming production. On the supply side, coke inventories at coke plants still remained at medium-high levels, and most coke plants are currently in a break-even state, intensifying the game sentiment for the first round of coke price increases. On the raw material side, both mines and independent coal washing plants are actively producing, with no expected production cuts. With the recent market sentiment warming up, the trading atmosphere in the coking coal market has been hot, with coal prices rising narrowly and traders’ speculative psychology increasing. It is expected that coke prices will remain stable in the short term.

Price Forecast for the Steel Market

Due to the severe impact of increased US tariffs on global trade, freight rates for various types of ships have continued to decline, reflecting a weakening demand for bulk commodities. The demand for steel products both domestically and internationally has also been weak, with JFE Steel in Japan planning to shut down a blast furnace and domestic traders experiencing a continuous decline in construction steel transactions for multiple days, leading most of them to choose to lower prices for shipments. Meanwhile, the prices of iron ore and scrap steel have continued to decline, reducing the cost support for steel prices. In the short term, steel prices may continue to weaken.