Chinese Major Steel Makers to Reduce Sales Price by 300 Yuan/t in August

Bao Steel and Wuhan Iron & Steel announced on Tuesday both companies lower selling price of steel products by 300 yuan (approximately 3,900 yen) per tonne in August. Bao Steel’s hot coil selling price will become 4,442 yuan per tonne for SPHC with 3 millimeters of thickness without tax rebate, which will lower for 2 months in a row by total 800 yuan. Bao Steel will implement additional price down by about 200 yuan effective for July sales against long standing customers. China Steel, Taiwanese largest steel maker, recently announced price down for September contracts as well. Asian steel market shows downtrend evidently.

Japanese steel trader said Chinese steel makers seem to adjust their selling prices along current market price down when Chinese activities of building construction or manufacturing industry are slowed.

Bao steel’s selling price is 4,342 yuan per tonne for SS400 hot coil with 5.5 mm of thickness, 4,597 yuan per tonne for SPHC pickling sheet with 3 mm of thickness, 5,226 yuan per tonne for SPCC cold rolled coil with 1 mm of thickness, 4,977 yuan per tonne for DC51D hot dipped sheet with 1 mm of thickness and 6,917 yuan per tonne for SECC electrogalvanized sheet with 1 mm of thickness. Electric steel sheet price will lower by 300-500 yuan per tonne.

Wuhan Iron & Steel will lower the selling price by 300 yuan per tonne for cold rolled sheet, hot dipped sheet, colored sheet and wire rod while by 500 yuan per tonne for non-directional electric sheet. The firm implements steel output reduction with other 3 group makers in response to slow demand mainly in construction market.

Chinese hot coil market price (3 mm thick) decreased by 270 yuan to 4,020 yuan per tonne last week, according to Chinese Iron & Steel Association. The price has downed by 18% since late April. Steel users are cautious in material procurement when the market price seems to continue downward for a while.

China Steel reduces hot coil selling price by 1,800 Taiwan dollars (approximately 5,400 yen) per tonne. Asian steel market is likely to weaken in response to price down announcement by Chinese and Taiwanese major steel makers. On the other hand, Japanese integrated steel makers aim to raise their selling prices for July-September. Market players cautiously watch Tokyo Steel’s price announcement for August contracts released in next week or POSCO’s next price announcement.