- Seasonal demand expectations support steel prices
- Rising iron ore, coking coal lift production costs
Chinese billet prices rose by RMB 50/t ($7/t) d-o-d to RMB 3,050/t ($454/t) on 31 August, while SHFE rebar futures gained RMB 55/t ($8/t) to RMB 3,143/t ($467/t). Meanwhile, Chinese billet export offers increased to $460/t FOB.
The price gains were supported by firmer demand expectations as China entered the seasonal peak steel consumption period. Steel futures extended their rally for the 12th consecutive working day, while domestic steel prices rose by around RMB 20-30/t across several markets on 31 August. Some mills also closed offers in the afternoon, anticipating further price increases.
Rising raw material costs provided additional support. Iron ore reached $99/t for 62% Fe, while coking coal prices increased another 6%. Market expectations of a further RMB 100/t increase in coke prices also strengthened mill cost pressures. Against this backdrop, tighter low-priced billet availability and stronger domestic prices pushed export offers higher to $460/t FOB.
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