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Steel prices fell slightly in October
In October, the steel market continued to experience oversupply conditions, with steel 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 output. This resulted in a weakly balanced market, with steel prices expected to remain relatively stable.
1. Domestic steel prices continued to fall slightly throughout the month. By the end of October, the China Steel Price Index (CSPI) stood at 99.34 points, a decrease of 1.23 points (1.22%) from the previous period and 6.05 points (5.74%) lower than the same period last year. The index fell below 100 points again, signaling continued downward pressure on prices.
2. Prices of long products and sheet materials both declined. The CSPI long product index reached 101.52 points, down 1.33 points or 1.29% from the previous month, while the sheet index was at 98.70 points, a drop of 1.25 points or 1.25%. Compared to the same period last year, the long product index fell by 8.00 points (a 7.30% decrease), and the sheet metal index dropped by 4.07 points (a 3.96% decrease).
3. Prices of major steel products also continued to decline. According to data from the China Iron and Steel Association, all eight monitored steel products saw price reductions. High-grade steel, rebar, hot-rolled coils, and medium- and thick-plate prices dropped by 52, 47, 72, and 57 yuan/ton respectively from the previous quarter. Angle steel, galvanized steel sheets, and hot rolled seamless steel tubes saw price declines increase slightly, falling by 48, 25, and 53 yuan/ton respectively. Cold-rolled sheet prices reversed from rising to falling, dropping by 34 yuan/ton.
4. Steel prices showed a weekly decline trend, with the CSPI index declining for the eighth consecutive week starting from the fourth week of August through the fourth week of October. In November, prices initially continued to fall in the first week, but then rebounded slightly in the second and third weeks.
In terms of domestic market analysis, although crude steel daily output declined in October, it remained at a relatively high level. The National Day holiday also contributed to a slowdown in steel demand, resulting in a slight drop in steel prices.
1. Major steel industries continued to grow, albeit at a slower pace. From January to October, fixed asset investment nationwide increased by 20.1% year-on-year, with a slight decline in growth compared to the previous months. Real estate development investment rose by 19.2%, but the growth rate slowed. Industrial output above designated size increased by 10.3% year-on-year, while total social electricity consumption decreased by 4.71% month-on-month. Rail freight volume increased slightly, but the growth rate narrowed. The PPI remained flat, with a year-on-year decline of 1.5%, which was 0.2 percentage points higher than in September. Manufacturing PMI stood at 51.4%, up 0.3 percentage points from the previous month, though new orders and export orders declined slightly.
2. Crude steel daily output declined slightly but remained at a high level. In October, pig iron, crude steel, and steel production reached 58.75 million tons, 65.08 million tons, and 92.81 million tons respectively, with year-on-year growth rates of 7.7%, 9.2%, and 12.3%. Daily crude steel output was 2.0994 million tons, a decrease of 81,300 tons or 3.73%. Steel exports increased by 150,000 tons, reaching 5.07 million tons, while imports fell by 100,000 tons to 114 million tons. Despite the monthly decline in crude steel output and an increase in net exports, supply-demand imbalances persisted due to the National Day holiday.
3. The price of imported iron ore continued to rise, providing some support to steel prices. In October, the price of imported iron ore (customs) increased by $2.39 per ton, or 1.89%, marking the third consecutive month of gains. Coking coal prices rose by 70 yuan/ton, or 6.39%, while domestic fine iron ore powder, metallurgical coke, and scrap prices declined slightly. The increase in iron ore prices had a supportive effect on steel prices.
On the international stage, steel prices continued to decline at the end of October. The CRU International Steel Composite Price Index stood at 166.6 points, down 1.6 points or 0.9% from the previous month, and 4.0 points or 2.3% lower than the same period last year.
1. Prices of long products and sheet materials declined, with sheet metal seeing a sharper drop. At the end of October, the CRU long product index was at 182.2 points, down 1.3 points or 0.7% from the previous month, while the sheet metal index was at 159.5 points, a decrease of 1.7 points or 1.0%. Compared to the same period last year, the long product index fell by 6.8 points or 3.6%, and the sheet metal index dropped by 1.9 points or 1.2%.
2. North American steel prices rose in the final quarter, European prices fell, and Asian prices continued to decline. In North America, the CRU North American steel price index reached 172.2 points, up 2.3 points or 1.4% from the previous quarter. U.S. manufacturing PMI increased to 56.4%, with new orders rising slightly. However, capacity utilization fell to 75.8%. In Europe, the CRU European steel price index dropped to 157.7 points, a decrease of 5.1 points or 3.1%. In Asia, the CRU Asian steel price index fell to 168.7 points, down 1.1 points or 0.7% from the previous quarter.
Looking ahead, the steel market is expected to remain stable in the latter half of the year. With the national economy showing signs of stabilization, steel demand continues to grow, and inventories have been steadily decreasing. Although there are concerns about rising iron ore prices and potential further declines in steel exports, the overall market is expected to remain in a weak balance, with steel prices unlikely to see sharp rebounds.
Key issues to watch in the coming months include the continued rise in imported iron ore prices, the potential for further declines in steel export prices as international markets enter their off-season, and the ongoing challenge of overcapacity in the steel industry. While government policies aim to address these issues, the market will need to adapt to changing conditions in the near term.