Zhonghong Steel Holds September Prices Steady Amid Demand Outlook

Zhonghong Steel has decided to maintain stable domestic prices for its key steel products in September, opting for a flat pricing strategy across hot-rolled, cold-rolled, and galvanized steel. This move aims to bolster market confidence and enhance customer competitiveness in receiving orders, despite expectations of a rebound in steel demand.

The company pointed to a stable trend in coal and iron ore prices, coupled with high production costs, as factors supporting the decision. The market is gradually finding a bottom, further reinforced by price increases announced by major Chinese steel mills like Baosteel. This suggests a strengthening price floor for steel products.

Globally, economic indicators suggest a continued moderate recovery. The US saw its CPI annual rate drop for the second consecutive month to 3.4% in July, easing pressure on the Federal Reserve's monetary policy. The S&P Global manufacturing PMI remained above 50, indicating sustained expansion in global manufacturing activity.

In terms of supply and demand, Chinese steel production saw a notable decrease in late July, with inventories also declining. While global steel trade flows are diversifying due to EU trade measures, Asian steel markets are showing signs of bottoming out after earlier price corrections. Zhonghong Steel's decision reflects these complex market dynamics, balancing cost pressures with a cautiously optimistic outlook on demand.