SunSirs: Domestic Mild Steel Plate Prices Fell 1.17% (August 18-22)

Price trend

In the first half of the week, rebar futures contracts weakened, with end-users purchasing on demand and speculative demand decreasing. Market sentiment was weak, leading to a slight decline in steel prices across the board. In the second half of the week, rebar futures contracts fluctuated, with steelmakers in many regions holding steady and supporting prices. Market prices were generally stable and consolidating. According to the Sino-Sino Commodity Market Analysis System, the price of ordinary mild steel plate (material: Q235B; specification: 20) on August 22nd was 3,392 RMB/ton, down 1.17% from the previous Monday.

Influencing factors

Billet Market: Domestic billet prices initially fell and then stabilized last week. As of August 22nd, the tax-inclusive price of standard square billet in Tangshan was 3,020 RMB/ton, a 40 RMB/ton decrease from the previous week. Inventory levels at major warehouses in Tangshan stood at 944,600 tons, an increase of 9,000 tons from the previous week. As September approached, a survey of 22 steel mills in Tangshan revealed that 45% planned maintenance but were awaiting further notice, 32% had confirmed their plans, and 23% had not yet commenced. The domestic billet market is expected to fluctuate and weaken next week.

Supply and Demand

Last week marked the beginning of the end of the hottest days of summer. High temperatures persisted across much of China, with localized torrential rains in North and South China making outdoor construction more difficult. End-users purchased on demand, and coupled with the volatile decline in futures prices, speculative demand decreased, market trading remained sluggish, and apparent demand for rebar remained low.

Market outlook

Overall, the continued high temperatures of autumn, coupled with localized heavy rain across much of China, continued to dampen demand for rebar, resulting in sluggish market activity and rising resource inventories for six consecutive weeks. Meanwhile, production was also under pressure, with blast furnace operating rates declining for the second consecutive week. This suggests that the market was experiencing a pronounced off-season demand, leading to more cautious market activity and price adjustments closely aligned with futures prices. Given the current weak macroeconomic data, weak adjustments in high-priced coal and ore prices, and waning support from raw material costs, the domestic mild steel plate market is expected to remain weak next week.

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