In October, the steel market continued to experience a surplus, leading to a slight decline in steel prices. As the month progressed, the market gradually moved into the off-season for steel consumption, with both demand and production expected to decrease. This will likely maintain a weak balance in the market, keeping steel prices relatively stable.
Domestically, steel prices saw a continued drop. By the end of October, the China Steel Price Index (CSPI) stood at 99.34 points, down 1.23 points (1.22%) from the previous period and 6.05 points (5.74%) compared to the same time last year. The index fell below 100 for the second consecutive month.
Both long products and sheet materials saw price declines. The CSPI Long Products Index was at 101.52 points, down 1.33 points (1.29%) from the previous month, while the Sheet Index reached 98.70 points, down 1.25 points (1.25%). Compared to the same period last year, the Long Products Index dropped by 8.00 points (7.30%), and the Sheet Index fell by 4.07 points (3.96%).
Prices for major steel products also declined. Among the eight monitored products, high-grade steel, rebar, hot-rolled coils, and medium- and thick-plate prices all dropped significantly. For instance, rebar fell by 47 yuan/ton, and hot-rolled coils dropped by 72 yuan/ton. Meanwhile, angle steel, galvanized steel sheets, and hot rolled seamless steel tubes saw slight increases in price declines, falling by 48, 25, and 53 yuan/ton respectively. Cold-rolled sheets shifted from rising to falling, dropping by 34 yuan/ton.
The weekly trend showed a consistent decline in steel prices since the fourth week of August, with the CSPI index declining for eight consecutive weeks. Although there was a slight rebound in the first week of November, the following weeks saw minimal recovery.
In terms of domestic market analysis, despite a slight decrease in daily crude steel output, overall levels remained high. The National Day holiday further slowed demand, contributing to the slight price drop.
Major steel industries continued to grow, though at a slower pace. Fixed asset investment increased by 20.1% year-on-year, real estate development investment rose by 19.2%, and industrial output grew by 10.3%. However, some indicators like new orders and export orders showed signs of slowing.
Crude steel output decreased slightly but remained at a high level. Pig iron, crude steel, and steel output were 58.75 million tons, 65.08 million tons, and 92.81 million tons respectively in October, with growth rates of 7.7%, 9.2%, and 12.3%. Despite a monthly decline in crude steel output, net exports increased, but supply-demand imbalances persisted due to the holiday season.
Imported iron ore prices continued to rise, providing some support to steel prices. The price of imported iron ore increased by $2.39/ton or 1.89% in October, marking the third consecutive month of increases. Coking coal prices also rose, while domestic fine iron ore, metallurgical coke, and scrap prices declined slightly.
Internationally, steel prices continued to fall. The CRU International Steel Composite Price Index ended October at 166.6 points, down 1.6 points (0.9%) from the previous month and 4.0 points (2.3%) from the same period last year.
North American steel prices saw a mixed performance, with some segments rising and others falling. In Europe, steel prices declined as economic conditions remained uneven. In Asia, prices continued to fall, with Japan's manufacturing PMI showing improvement, while China's PMI remained stable.
Looking ahead, the steel market is expected to remain relatively stable. Economic growth continues to drive steel demand, and social inventories are decreasing. While challenges such as rising iron ore prices and declining export prices persist, the market is entering an off-season, which may limit sharp price increases.
Key issues to watch include the continued rise in iron ore prices, potential further declines in export prices, and the challenge of addressing overcapacity in the steel industry. With policy measures being implemented, the market may see gradual improvements, but short-term oversupply remains a concern.
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