The steel prices in the sub-region last week showed mixed movements. In Shanghai, regional steel prices saw a slight decline, dropping by RMB 20/ton from last Friday, with the price reported at RMB 3,620/ton as of September 6. In Beijing, prices remained volatile, standing at RMB 3,650/ton on the same date, a decrease of 30 yuan/ton compared to last Friday. Meanwhile, Guangzhou experienced a sharper drop, with prices falling to RMB 3,910/ton, down 40 yuan/ton from the previous week.
According to the latest data, the average price of premium grade 35 rebar in the main domestic market was RMB 3,708/ton on September 6, a decrease of 2 yuan/ton from last Friday. The average price of 6.5mm high line stood at RMB 3,745/ton, remaining stable from the previous week. Despite a boost in PMI data at the start of the week, steel futures returned to a weak trend from Tuesday onwards. Spot transactions declined, and market participants adopted a more cautious stance, keeping steel prices under downward pressure.
Market data also indicated that the average daily purchase volume of terminals in Shanghai this week increased by 55.3%. According to market feedback, the current week appeared to be a reversal from last week’s volatility, with most activity concentrated on Monday and a sharp drop on Tuesday. Sales volumes remained light on Wednesday and Thursday, before stabilizing on Friday, although overall demand still showed an upward trend. Additionally, the market has become more irregular, making it harder for buyers to secure goods.
Several factors influenced the domestic construction steel market last week. First, steel mill prices remained within a narrow range. This week, domestic steel prices fluctuated minimally, with only a few mills adjusting ex-factory prices based on contractual orders. For example, leading steel mills in East China reduced their antenna material prices by 30 yuan/ton, while Shagang, Yonggang, and Nangang maintained stable pricing. Given the price pressures since late August, and the lack of price recovery in late August, it is expected that steel mills will face increased pressure in mid-September.
Second, raw material prices also showed limited fluctuations. As of September 6, the ex-factory price of ordinary carbon billet in the Tangshan area was RMB 3,130/ton, down 20 yuan/ton from last Friday. Scrap prices in Jiangsu were reported at RMB 2,620/ton, while coke prices in Jiangsu fell by 20 yuan/ton. In Shanxi, coke prices rose by 20 yuan/ton to RMB 1,150/ton. The price of 66% dry iron ore in Tangshan remained unchanged at RMB 1,070/ton. At the same time, the 62% Platts iron ore index dropped to USD 136/ton, a decrease of USD 3/ton from the previous week.
Third, steel inventories continued to decline. According to monitoring data, total inventory of major domestic steel products reached 14.41 million tons as of September 6, a weekly decrease of 1.25%. This marks the 25th consecutive week of declining inventory, with major cities like Shanghai and Hangzhou seeing inventory reductions. However, thread stock in Beijing and Guangzhou continued to rise. At the end of August, key steel inventories were 12.45 million tons, down 379,500 tons from the previous year, reflecting strong demand and reducing pressure on steel prices.
Analysts noted several factors that could influence future market trends. First, steel mills have limited production growth. According to the China Steel Association, crude steel output in late August was 2.119 million tons per day, up 0.05% from the previous month. Key steel mills produced 1.74 million tons per day, an increase of 0.07% from the previous month. After a three-month rebound, steel mill production growth remains constrained, likely due to rising raw material costs, shrinking profit margins, and uncertainty about future demand. However, this cautious approach may help maintain a stable market in the coming months.
Second, steel exports surged in August. According to customs data, China’s steel exports reached 6.14 million tons, up 19.22% year-on-year and 44.8% from the previous month. This marked the highest monthly export volume in nearly five years since September 2008. From January to August, net crude steel exports totaled 44.66 million tons, an increase of 6.61 million tons compared to the same period last year. The surge in exports was largely driven by low-price promotions by domestic steel mills and a modest recovery in European and American markets, which helped ease domestic supply pressure.
Finally, overall economic data improved. According to the National Bureau of Statistics, CPI rose 2.6% year-on-year in August, while PPI fell 1.6% year-on-year. After hitting a 16-month high in August, the manufacturing PMI data also showed a six-month high, while CPI hit its lowest level in three months. These figures indicate positive signs of economic stabilization under ongoing policy support.
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