Daily Steel Market: Steel Prices Fluctuate with Upward Bias

I. Summary of Steel Spot and Futures Prices

On May 7, the domestic steel market saw price increases. The ex-works price of Qian’an ordinary billet in Tangshan rose by 10 yuan to 3,100 yuan/ton, including VAT. In terms of trading, market acceptance of high-priced resources declined, with notable weakening in high-priced transactions. End-user procurement turned more cautious, and speculative sentiment in the market faded again. While afternoon futures maintained volatile strength, their support for spot market sentiment was limited, and trading in high-price segments continued to slow. Total daily transaction volumes fell compared to the previous day.

II. Daily Prices of Raw Materials and Fuels

Iron Ore: On May 7, import iron ore prices at Shandong ports remained flat compared to the previous trading day. Regional traders showed moderate quoting enthusiasm, but few transactions were concluded as of now. On the buying side, regional steel mills restocked as needed, with limited inquiries. Current mainstream prices: 60.8% PB fines at 790–795 yuan/ton, Super Special fines at 670–675 yuan/ton, and Mackay fines at 785–790 yuan/ton.

Scrap Steel: On May 7, the average price of heavy scrap in 45 major cities stood at 2,116 yuan/ton, up 8 yuan/ton from the previous trading day. Recent performance of finished steel in both futures and spot markets has been favorable, driving scrap prices higher as well. Over the May Day holiday, most steel mills saw inventory declines compared to pre-holiday levels, creating restocking demand. As the holiday ended, scrap resource circulation gradually resumed, and mills raised prices to restock. However, procurement remained cautious, with only modest price increases. Scrap steel prices are expected to maintain a narrow, upward-biased trend in the near term.

Coke: On May 7, coke prices remained relatively stable. Coking coal sentiment was strong, with most coal varieties seeing price increases. In Linfen Anze, coking coal prices rose by 30 yuan/ton, with low-sulfur primary coking coal reaching 1,590 yuan/ton after the increase. Coke producers operated normally with stable supply. Steel mills continued to procure primarily based on immediate needs and have yet to clearly respond to the proposed third round of coke price hikes. While cost support for coke exists, downstream procurement remains stable, leaving room for negotiation over the third round of increases.

III. Steel Market Price Forecast

Supply: This week, total output of the five major steel products stood at 8.3983 million tons, a decrease of 150,000 tons week-on-week. Output of rebar, wire rod, and hot-rolled coils declined, while cold-rolled coils and medium/heavy plates increased.

Inventory: Total inventory of the five major steel products fell to 16.4658 million tons this week, a decrease of 13,300 tons week-on-week. Mill inventories stood at 4.3876 million tons, down 50,600 tons, while social inventories totaled 12.0782 million tons, down 63,900 tons.

Thanks to improved supply-demand fundamentals in the steel market and ongoing inventory declines, coupled with concentrated post-holiday restocking by downstream users, steel prices and trading volumes rose together on Wednesday. However, trading volumes slipped on Thursday, with moderate market acceptance of high-priced resources. The upward momentum in steel prices has slowed, and prices are expected to fluctuate within a high range in the near term.