Chinese Steel Makers Expected to Implement Price Hike for September

Chinese major steel makers are expected to announce price hike for September sales this week. Chinese steel market price has risen since late July and steel shipment has improved. Some media reported the makers would raise the selling price by 300 yuan per tonne or more. The makers are likely to improve profitability by price hike after price down in August. However, inventory adjustment continues at manufacturing industry and steel demand still maintains slow. Small-middle class steel makers are said to be increasing outputs. Chinese steel market may turn weak again.

Hot rolled coil market price has increased by 380 yuan to 4,380 yuan per tonne for the size with 3 millimeters thick in Beijing for late 3 weeks, according to China Iron & steel Association. Cold rolled sheet and rebar market prices are increasing, too. Dealers and users are purchasing steel products when steel prices hit bottom and steel demand is expected to improve by governmental stimulus measures.

Bao Steel and Wuhan Steel reduced their selling prices by 300 yuan per tonne for August sales. They implemented price down for 2 months in a row by total 800 yuan and fixed bottom to stimulate steel users’ procurement. As a result, the market price rebounded and the makers seem to turn into price hike.

Steel shipment is improving at makers and dealers. However, actual demand is said not to have recovered since manufactures continue inventory adjustment and building constructions maintain slow. The recent shipment recovery is likely to involve speculate demand.