China Steel Association: Seasonal Weakness Continues to Drive Down Steel Prices in November

Stock News11-20

In October, China's domestic steel market experienced a downward trend, with a slight rebound at month-end, though the overall trajectory remained weak. Entering November, seasonal factors accelerated demand contraction, reinforcing the bearish fundamentals and sustaining a weak, volatile price trend.

1. **October Steel Price Index Declines Further** According to the China Iron and Steel Association (CISA), the October average for the China Steel Price Index (CSPI) stood at 91.92 points, down 1.26 points (1.35%) month-on-month and 9.10 points (9.01%) year-on-year. - **Long Products Index**: Averaged 92.23 points, down 1.49 points (1.58%) monthly and 13.04 points (12.39%) annually. - **Flat Products Index**: Averaged 91.17 points, down 1.15 points (1.25%) monthly and 6.80 points (6.94%) annually. By end-October, the CSPI closed at 92.34 points, marking a 1.38% monthly drop and a 7.19% annual decline. Year-to-date, the index averaged 93.50 points, down 9.58% from 2024.

2. **Regional and Product-Specific Trends** All six major regions recorded monthly declines, led by Central-South China (-1.72%) and trailed by East China (-0.96%). Key product performances: - **Hot-Rolled Coils**: Fell sharply by ¥63/ton. - **Seamless Pipes**: Edged down ¥25/ton.

3. **Demand-Supply Dynamics** - **Investment Slowdown**: January-October fixed-asset investment dipped 1.7% YoY, dragged by a 14.7% plunge in property development. Infrastructure investment turned negative (-0.1%) for the first time this year. - **Manufacturing Resilience**: Growth slowed to 2.7%, with October PMI contracting to 49.0%. Auto production rose 13.2% YTD but showed deceleration. - **Steel Output vs. Consumption**: Crude steel output fell 3.9% YTD, while apparent consumption dropped 6.5%, exacerbating oversupply.

4. **Global Market Weakness** The CRU global steel price index declined 1.2% monthly to 186.4 points in October, with drops across North America (-1.4%), Europe (-2.0%), and Asia (-0.5%).

5. **Outlook** With high inventories and tepid demand, steel prices face continued pressure. Policy support—including capacity controls and anti-dumping measures—may stabilize the market, but seasonal headwinds and global trade uncertainties persist. Industry self-discipline in production remains critical to balancing supply-demand dynamics.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment