**Cold Fall in the Steel Market: A Dilemma for Steel Prices**
This week, the steel market has seen a mix of fluctuating trends and cautious optimism. Let’s break down the key developments across different segments:
**Raw Materials:**
Tangshan billet prices showed an initial strong start but then softened, with multiple price swings throughout the week. Despite the volatility, the near-term market sentiment remained relatively positive, although transaction volumes decreased. On Wednesday, Yanyan Steel issued 3,195 contracts—15 times higher than the current market level. While the market remains light, traders still maintain confidence as we approach the "Golden September" period. However, recent weak demand has led to a slight decline in billet sales, and the overall market is under pressure. That said, high raw material costs and tight spot resources continue to support billet prices, keeping the market relatively stable with a margin range of 10–30 yuan.
The iron ore market was quiet this week, with the Platts Index dropping by $1 due to weaker foreign mine bids. Spot prices stayed steady, while some steel mills adjusted their prices slightly upward. The mining sector remains optimistic, maintaining regular shipping rhythms, and individual sellers are hesitant to offload inventory. It's expected that imported ore will remain around $138 per ton, with domestic mines showing slight price increases in certain regions.
Coke prices rose by 20–50 yuan/ton this week, driven by stronger downstream demand. Steel mills increased purchases, pushing coking coal prices higher. With the upcoming National Day and Mid-Autumn Festival holidays, demand for steel stocks is expected to grow further. Local markets are seeing a boost, and it's anticipated that coke prices will continue to rise next week by 20–30 yuan/ton.
The scrap market saw a small increase this week, as some manufacturers raised prices to attract more supply. However, the early start of “Jinjiu†(Golden September) was not as strong as expected, and large steel enterprises saw only modest improvements in arrivals. As a result, the market lacks clear direction, and buyer interest remains low. Sellers are also reluctant to lower prices, so the scrap market is expected to remain weak in the short term.
Pig iron prices were stable but slightly stronger this week. Raw materials and finished products have been consolidating, creating a wait-and-see atmosphere. Some steel mills are struggling to secure goods at low prices, and turnover is poor. Despite this, high cost support keeps prices from falling too sharply. It’s expected that the pig iron market will remain stable in the coming week.
**Steel Products:**
Tangshan building materials initially rose after a period of suppression, supported by eased financial pressure and rising costs. However, weak follow-up demand caused prices to drop again. Although some markets have increased stock levels, all parties are cautious about making major adjustments. It's likely that steel prices will continue to fluctuate in the coming week, with potential for further weakness.
Tangshan profile steel started the week with oscillations but soon weakened due to high transaction volumes. Environmental policies and limited billet supply have kept prices under pressure, and steel mills are not eager to cut prices. However, later in the week, heavy volumes began to appear, increasing shipping pressures and reducing manufacturer confidence. Low-cost resources surged on Thursday, leading to a revision of market expectations. With weak demand for “Jinjiu,†suppliers face pressure, and the market is expected to remain weak, though declines may be limited due to high costs.
Tangshan pipe prices were stable and slightly stronger this week. Seamless pipes held steady, while welded pipes rose by 20 yuan/ton. Although raw material prices strengthened, terminal demand remained sluggish. Pipe mills tried to push prices up, but the market remained weak. As temperatures cool, construction activity is expected to pick up, gradually increasing pipe demand. However, businesses are cautious, focusing on small-scale procurement. It's expected that pipe prices will see a slight increase next week, around 50 yuan/ton.
Tangshan steel strip prices were slightly stronger early in the week, with leading mills raising prices by 40–50 yuan. However, transactions weakened later in the week, and prices stabilized. During “Golden September,†many suppliers restocked, but steel mill maintenance schedules increased, causing a temporary drop in output. This provided some support for market prices. It’s expected that steel strip prices will remain stable or weak in the coming week.
**Current Operation Suggestions:**
For raw materials, it's recommended that businesses make small weekly replenishments and take advantage of opportunities for timely delivery. Traders should focus on single operations and purchase strategically.
For steel products, despite a slight decline, the market remains volatile. Low-cost resources continue to affect mainstream prices. Merchants are advised to focus on de-stocking, optimize inventory, and adopt a fast-in, fast-out strategy to manage risks effectively.
**Market Overview – Tangshan:**
Raw materials in Tangshan were mixed this week. Although some local steel companies slightly increased their iron ore fines purchase prices, the overall market remained cautious due to weak demand for finished products. Iron ore prices stayed stable, while coke and furnace burden prices rose slightly. Strong downstream steel purchasing enthusiasm and rising coking coal prices provided support to the market. However, tight supply and limited middleman participation kept the market in check.
Steel products in Tangshan weakened this week. 145 strip prices fell slightly, impacted by weak steel bills and lack of transaction support. Although some pipe manufacturers had limited stock, they struggled to secure significant orders. Following price adjustments, companies took profits and maintained normal sales. Downstream building material demand remained low, but some low-cost resources saw slight improvement. Weak steel bills pushed prices back into a weaker trend. The demand for “Jinjiu†was weaker than expected, and profile transactions did not show significant volume. Under cost pressure, prices continued to fall slightly.
**Industry News This Week:**
(1) China’s stainless steel crude steel output is expected to exceed 25 million tons in 2020, according to Li Cheng, Honorary Chairman of the Stainless Steel Branch of the China Special Steel Enterprises Association. He also highlighted that long-term economic goals such as urbanization and energy conservation will drive growth in the stainless steel industry.
(2) Some coal prices rose in the second half of the year, offering hope for a rebound. However, overall coal prices are still expected to face downward pressure due to increased supply and high inventories. Demand is expected to rise slightly, but the market will remain oversupplied.
(3) Shougang Peruvian Company faced labor disputes, with workers demanding higher wages and better conditions. This issue, which has persisted for over two decades, has led to repeated strikes, impacting the company’s operations and profitability.
(4) Increased iron ore shipments from Port Hedland, Australia, were attributed to growing Chinese demand. China’s manufacturing recovery suggested a stable economy, supporting global steel demand. Analysts believe that China’s economic growth will continue steadily in 2014.
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