- Politburo meeting fails to deliver significant stimulus
- Iron ore spot prices drop but Aussie met coal edges up
China’s steel market witnessed a downtrend this week amid drop in Shanghai Futures Exchange (SHFE) contracts. Domestic steel product prices, including billet, hot-rolled coil (HRC) and rebar, fell w-o-w. Moreover, in the raw materials segment, iron ore prices dipped w-o-w.
1.Iron ore spot prices drop w-o-w: The benchmark iron ore fines spot prices fell $4/t w-o-w to $99/dmt CFR China on 1 August driven by weak market sentiment after the recent Politburo meeting fell short of expectations. Mills restocked only as per requirement, while traders stayed cautious. Portside trading was muted and the physical market weak. Port prices dipped on low interest, though strong demand and a wider Fe 65/62% spread kept high-grade fines prices firm.
Iron ore inventory at Chinese ports fell by 0.75 mnt w-o-w to 130.3 mnt on 31 July, as per SteelHome data.
a) Spot pellet premium edges up w-o-w: Spot pellet premium for Fe 65% grade pellet increased by $1.2/t w-o-w to $18.65/t CFR China on 30 Aug.
b) Spot lump premium flat w-o-w: Spot lump premium held largely stable at $0.1830/dmtu on 1 Aug.
2.Coking coal prices edge up w-o-w: Seaborne coking coal prices saw a marginal uptick in recent trades, with Australian PHCC rising $6/t w-o-w to $183/t FOB. In China, met coke prices have climbed RMB 200–220/t since mid-July amid strong demand, tight supply, and high coal costs. Despite shrinking margins, producers may push for a fifth hike soon.
3.Billet prices drop by RMB 100/t w-o-w: Steel billet prices in Tangshan declined by RMB 100/t ($14/t) w-o-w to RMB 3,060/t ($425/t, including VAT) as of 1 August. After starting the week with a steep drop on 28 July, prices recovered slightly mid-week but failed to sustain gains amid weak market sentiment. The overall decline was driven by falling raw material costs, the absence of fresh economic stimulus, and caution over potential US tariffs.
While brief support came from positive trade signals and government interventions, market activity remained largely limited to need-based buying.
4.Domestic HRC prices drop: China’s HRC offers dropped by RMB 50/t ($7/t) w-o-w to RMB 3,240/t ($449/t) against RMB 3,290/t ($456/t) following the decline in SHFE futures. SHFE HRC futures fell by RMB 69/t ($10/t) w-o-w to RMB 3,408/t ($473/t) on 1 August against RMB 3,477/t ($482/t) on 25 July.
Moreover, Chinese HRC export offers increased by $12/t w-o-w to $490/t against $478/t a week ago. Moreover, market participants adopted a wait-and-watch approach amid increased price volatility.
5.Domestic rebar prices decline: China’s rebar declined by RMB 40/t ($6/t) w-o-w to RMB 3,270/t ($453/t) against RMB 3,280/t ($459/t), a week ago. SHFE rebar futures (October 2025 contract) stood at RMB 3,213/t ($446/t) on 1 August, declined by RMB 103/t ($14/t) as compared to RMB 3,316/t ($463/t) on 26 July.
Rebar prices witnessed a decline as end-user demand remained subdued in various regions, weighed down by extreme weather conditions like heavy rain. Additionally, a drop in the futures market added further pressure on spot prices, market sources noted.
China’s Shagang Steel has increased its rebar and wire rod prices by RMB 200/t ($28/t) for early-Aug’25 sales, as per sources. Prices of rebars, coiled rebars, and wire rods were as follows:
- Rebars (16-25 mm): RMB 3,550/t ($492/t)
- Coiled rebars (8-10 mm): RMB 3,710/t ($514/t)
- Wire rods (6-10 mm): RMB 3,620/t ($502/t)
Outlook
Chinese steel prices may remain stable in the near term amid supply cuts and improving demand. Moreover, prices could see a slight dip, but expected production cuts in China and the gradual return of seasonal demand are likely to support the market and prices.
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