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Steel prices fell slightly in October
In October, the steel market continued to face an oversupply situation, with prices showing a slight decline. As the month progressed, the market gradually moved into the off-season for steel consumption, leading to a reduction in both demand and production. This has resulted in a weakly balanced market, with steel prices expected to remain relatively stable.
1. **Domestic Steel Prices Declined Slightly**
At the end of October, the China Steel Price Index (CSPI) stood at 99.34 points, down 1.23 points (1.22%) from the previous period and 6.05 points (5.74%) compared to the same time last year. This marked the second consecutive month that the index fell below 100 points.
2. **Long Products and Sheet Prices Both Dropped**
The long products index reached 101.52 points, declining by 1.33 points (1.29%) from the previous month, while the sheet index dropped to 98.70 points, a decrease of 1.25% from the prior month. Compared to the same period last year, the long products index fell by 8.00 points (7.30%), and the sheet index declined by 4.07 points (3.96%).
3. **Major Steel Products Continued to Fall**
Prices for eight key steel products monitored by the China Iron and Steel Association continued to fall in October. High-grade steel, rebar, hot-rolled coils, and medium-to-thick plates all saw declines, with reductions ranging from 47 to 72 yuan per ton. Angle steel, galvanized sheets, and seamless tubes also experienced price drops, while cold-rolled sheets reversed their upward trend and fell by 34 yuan per ton.
4. **Weekly Price Declines Persisted**
From the fourth week of August through the fourth week of October, the CSPI steel price index fell for eight consecutive weeks. In November, prices dipped slightly in the first week, then saw a small rebound in the following two weeks.
**Market Analysis: Domestic Steel Price Trends**
Despite a slight drop in daily crude steel output, overall levels remained high. The National Day holiday further dampened demand, contributing to the downward pressure on steel prices.
1. **Key Industries Show Growth but at a Slower Pace**
Fixed asset investment rose by 20.1% year-on-year from January to October, though the growth rate slowed from the previous quarter. Real estate development investment increased by 19.2%, but the pace of growth weakened. Industrial output rose by 10.3% in October, and the manufacturing PMI stood at 51.4%, indicating continued expansion, albeit with some weakening in new orders.
2. **Crude Steel Output Declined Slightly but Remained High**
In October, the daily crude steel output was 2.0994 million tons, a decrease of 81,300 tons or 3.73%. Although net steel exports increased, supply-demand imbalances persisted due to seasonal factors.
3. **Imported Iron Ore Prices Rose, Supporting Steel Costs**
The price of imported iron ore increased by $2.39/ton (1.89%) in October, marking the third consecutive month of gains. While domestic iron ore and coke prices fell slightly, the rising cost of imported raw materials provided some support to steel prices.
**International Market Outlook**
Steel prices in the international market declined at the end of October. The CRU International Steel Composite Price Index fell to 166.6 points, a decrease of 1.6 points (0.9%) from the previous month and 4.0 points (2.3%) from the same period last year.
1. **Long Products and Sheets Both Fell, with Sheets Declining Faster**
The CRU long product index dropped to 182.2 points, down 1.3 points (0.7%) from the previous month, while the sheet index fell to 159.5 points, a decline of 1.7 points (1.0%). Compared to the same period last year, the long product index fell 6.8 points (3.6%), and the sheet index dropped 1.9 points (1.2%).
2. **Regional Market Performance Varied**
North American steel prices rose slightly, driven by improved demand. European prices fell, reflecting economic uncertainty. Asian markets also saw declines, with Japan’s manufacturing PMI rising, while China’s PMI remained stable.
**Future Price Trends**
With the Chinese economy showing signs of stabilization, steel demand is expected to grow. Crude steel production has decreased, and inventories are falling. These factors suggest that steel prices will likely remain stable in the coming months.
**Key Issues to Watch**
First, the continued rise in imported iron ore prices may eventually impact steel mill costs. Second, steel export prices are expected to face downward pressure as global demand slows. Third, the oversupply issue in the steel market remains unresolved, with government policies aiming to address overcapacity.
Overall, the steel market is in a weak balance, and significant price increases are unlikely in the near term.