China Steel Prices Mixed: July Sees Slight Drop, Q3 Rises on Costs

China Steel Corporation (CSC) has announced its pricing strategy for July and the third quarter, reflecting a divergence in global steel market trends. For July, the company will implement a "flat to low" pricing approach for its monthly products, with key items such as hot-rolled coils and plates seeing a modest reduction of NT$300 per ton.

This adjustment comes amidst a complex international market. While steel prices in the US and Europe are consolidating at high levels, with US hot-rolled coil exceeding $1,200 per ton for the first time in three years, Asian market trends are varied. Japanese mills are increasing prices for thin plates, while Vietnamese producers are lowering theirs. Baosteel in China has maintained its July prices, indicating a mixed international outlook.

In contrast to the monthly adjustments, CSC's third-quarter pricing will reflect rising production costs. Prices for quarterly products are set to increase by NT$500 to NT$1,000 per ton. This rise is attributed to sustained high raw material costs, with iron ore remaining above $100 per ton and coking coal around $240 per ton. These elevated costs, coupled with supply-side constraints like China's steel production cuts and export controls, have driven up international steel prices significantly in the second quarter.

CSC's pricing decisions aim to balance market conditions with production costs. The slight decrease in July prices acknowledges a recent cooling in domestic prices, which had followed the international trend. However, the increase for the third quarter signals CSC's need to pass on accumulated cost pressures to maintain profitability amidst a fluctuating global supply and demand landscape.