- Higher raw material costs support steel prices
- Shrinking steel output reinforces bullish market outlook
Chinese billet prices increased by RMB 20/t ($3/t) d-o-d to RMB 2,990/t ($441/t), while SHFE rebar futures gained RMB 25/t ($4/t) to RMB 3,115/t ($460/t) on 15 July, supported by stronger commodity sentiment amid concerns over potential power shortages and tightening steel supply. Market confidence improved as stable production levels and expectations of stronger autumn demand lifted physical steel prices by around RMB 20/t ($3/t).
Rising raw material costs, with iron ore returning to $100/t (Fe 62%) and coking coal gaining 2%, further strengthened cost support. Meanwhile, mills raised export offers amid higher freight rates, a weaker US dollar, and renewed Middle East tensions, although Chinese billet export offers were heard around $457/t FOB. A 3% y-o-y decline in steel output further reinforced expectations of tighter supply.
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