Chinese steelmakers have been cutting production recently as the iron ores prices rose more significantly than steel prices. In the meantime, a number of leading producers already tentatively raise their prices for orders placed for August.

Wusteel has raised the prices for August orders by RMB 50-180/t, (US$8 – 29/t) the first hike for the leading steelmaker since May this year. Shagang Group, China’s largest private steelworks, also raised the construction steel prices by RMB 80-120/t ($12.8-19.3/t). Hebei Iron and Steel and several other Chinese steelworks quickly followed suit and raised their factory prices for steel products.

Baosteel, however, has decided to keep its prices for August orders unchanged as its major downstream markets, such as automobiles and household appliances normally have low demands in July and August.
Analysts say there is not enough support for the steel prices to keep rising as high temperature and rainy weather are reducing construction work and crude steel production is still running high.

CISA also agrees with this analysis and says s steel exports dropped month on month in May to June falling 120kt in June to 5.29Mt of finished steel. Total exports for the half year reached 30.690Mt and steel imports were 6.895Mt.

Source: China Metals e-mail