- Raw material costs firm; steel prices edge higher
- Market sentiment steady but demand remains weak
China’s steel market witnessed a slight improvement this week, with a modest uptick in futures. Domestic prices of hot-rolled coils (HRC) and rebars inched up, reflecting a mildly positive trend in the market. Notably, raw material prices showed a firm trend w-o-w, with iron ore spot prices rising slightly amid steady liquidity, billet prices gaining support from output curbs and policy optimism, while coking coal prices edged higher on tight supply and stronger buying interest.
Overall, market sentiment stayed cautiously optimistic as cost support and policy cues lent stability, though weak end-user demand continued to restrain major upward movement.
1. Iron ore spot prices inch up w-o-w: The benchmark iron ore fines spot prices rose by $2/dmt to $107/dmt CFR China on 31 Oct supported by decent liquidity. Market sentiment stayed mildly positive, supported by firm iron ore imports and stable macroeconomic data. However, buyers remained cautious amid weak steel margins and adequate stocks. With Tangshan’s output curbs in place until 3 Nov, mills limited purchases to essential needs, awaiting clearer signals.
Iron ore inventories at major Chinese ports recorded at 135.65 mnt on 30 Oct, increasing 2.05 mnt w-o-w as per data published by SteelHome.
a) Spot pellet premium remains firm w-o-w: Spot pellet premium for Fe 65% grade pellet held firm at $18.75/t CFR China on 29 Oct.
b) Spot lump premium stable w-o-w: Spot lump premium remained largely stable at $0.1270/dmtu on 31 Oct.
2. Coking coal prices edge up w-o-w: China’s met coke market witnessed a second round of price hikes amid tight supply, firm demand, and higher production costs. Steelmakers accepted the delayed increase, with Hebei prices up RMB 50-55/t
Meanwhile, Australian premium hard coking coal gained $5/t w-o-w to $197/t FOB on stronger Chinese buying interest.
BigMint’s premium hard coking coal (PHCC) index was assessed at $210/tonne (t) CNF Paradip, India, on 31 October, up by $3/t against the previous assessment on 24 October. Prices rose despite active trade activities.
3. Billet and rebar prices edge up w-o-w:
In week 44 (24–31 October), China’s billet and rebar markets showed mild improvement, supported by supply curbs, firmer raw material costs, and renewed policy optimism.
Tangshan billet prices rose RMB 50/t ($7/t) w-o-w to RMB 2,980/t ($420/t)Still, construction steel demand remained weak, limiting upside potential. Traders expect prices to stay range-bound in early November as policy-driven optimism faces resistance from slow real demand.
4. Domestic HRC prices inch up w-o-w: China’s domestic HRC offers inched up by RMB 50/t ($7/t) w-o-w to RMB 3,120/t ($439/t) as compared to RMB 3,070/t ($432/t) a week ago, driven by a slight uptick in SHFE futures. HRC futures on the Shanghai Futures Exchange (SHFE) January 2026 contracts rose by RMB 56/t ($8/t) w-o-w to RMB 3,308/t ($465/t) as on 31 October compared to RMB 3,252/t ($457/t) as on 24 October. However, d-o-d, contracts decreased by RMB 24/t ($3/t) against RMB 3,332/t ($468/t).
China’s HRC export offers remained stable w-o-w to $460/t FOB.
5. Domestic rebar prices rise slightly: China’s rebar prices were at RMB 3,130/t ($440/t), marginally up by RMB 30/t ($4/t) w-o-w from RMB 3,100/t ($436/t), following an uptick in SHFE futures SHFE rebar futures (January 2026 contract) saw a slight rise w-o-w by RMB 56/t ($8/t) w-o-w to RMB 3,109/t ($437/t) on 31 October as of 3,053/t ($429/t) on 24 October.
Outlook
China’s steel market saw slight improvement this week amid firmer raw material costs and policy optimism. Iron ore, coking coal, billet, HRC, and rebar prices edged up slightly, though weak construction demand limited gains. In the near term, prices are expected to remain range-bound, supported by cost factors but restrained by sluggish end-user demand.
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