China: Major steelmakers keep domestic HRC prices stable in Jul'26

• Rising coke prices lift production costs but demand remains weak
  
  
• Southeast Asian demand also slows amid rainy season, summer
  
  

SteelDaily: Major Chinese steelmakers have rolled over hot-rolled coil (HRC) prices for the domestic market in July.

Although pressure to raise prices is mounting due to rising raw material costs, steelmakers are opting for a conservative pricing strategy as sluggish demand and inventory burdens persist.

Ansteel, a listed subsidiary of Angang Group, Chinas second-largest steel group, announced on 11 June that it would freeze its domestic hot-rolled carbon steel prices for July. This is the first time AnSteel has frozen hot-rolled steel prices since March. The company had raised hot-rolled steel prices by a total of RMB 500/tonne (t) between March and June.

Prior to this, Baosteel, a subsidiary of China's Baowu Steel Group -- the worlds largest steelmaker -- also announced on 10 June that it would keep most of its domestic sales prices stable for July for major flat steel products, including hot-rolled steel. However, it raised prices of grain-oriented electrical steel (GOES) by an additional RMB 300/t.

Looking at Baosteel's recent pricing trends, the company had been raising prices by RMB 100-200/t per month since March for hot-rolled steel, plate steel, pickled steel, colour-coated steel, and non-oriented electrical steel but decided to maintain prices for most products in July.

The market views sluggish domestic demand in China and the steel off-season in Southeast Asia, a major export market, as the factors behind the price freeze.

An industry insider explained, "Demand in the Southeast Asian market has slowed due to the rainy season and high temperatures, while Chinese manufacturers are also refraining from actively building up inventories due to sluggish orders."

According to Mysteel, manufacturers are currently maintaining a low-inventory strategy, purchasing only what is necessary for immediate production. While hot-rolled steel production remains at high levels, distribution inventories are not decreasing rapidly, leading to growing supply and demand pressures.

According to a Mysteel survey, as of 4 June, hot-rolled steel inventories across 194 commercial warehouses nationwide in China totalled 4.59 million tonnes (mnt). This represents a decrease of just 5,000 tonnes compared to the previous week, whilst marking a 28% increase y-o-y.

Furthermore, between 28 May and 3 June, hot-rolled steel production at the 37 Chinese steelmakers surveyed by Mysteel totalled 2.95 mnt, a mere 0.09% decrease compared to the previous week.

With demand recovery proving sluggish, steelmakers scope for price increases is also limited. However, rising raw material prices are cited as a burden. This is because the recent sharp rise in prices of coking coal and coke within China is driving up production costs for steelmakers.

Meanwhile, Baosteel's June HRC (SS400 3mm1500mm) price stood at RMB 4,775/t (EXW), whilst Ansteel's HRC (Q235B 4.75mm1500mm) price was at RMB 4,400/t as of May.

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