Will Asian steel mills raise offers for Aug-Sept'23 deliveries?

The major steel mills in East Asia like Baoshan Steel were having a tough time over the past few months owing to squeezed margins. One important thing to watch out for is whether these large mills will increase their prices for August or September deliveries?

According to the China Steel Industry Association, prices of hot-rolled coils (HRCs) are at around RMB 3,973/t ($556). Prices keep fluctuating. Even though the cost is lower than the selling price, manufacturers in China and other countries were unable to increase offers amid lower bids, as demand recovery was weak while steel supplies rose.

Earlier this year, big mills like Baoshan raised their prices, but because there wasn't much demand in China they had to lower prices again. This also affected Taiwanese steel major China Steel Corporation (CSC) which had to cut prices recently.

The slow market in Asia also affected the price of imported steel into Japan. Tokyo Steel had to lower prices of steel sheets by JPY 10,000-12,000/t. Although Japanese steel prices are still higher compared to other Asian countries, profitability is not that good.

The Chinese government's actions to boost the economy and the margin of production cuts by steel mills in that country will determine how the market and steel prices behave in H2CY'23.

Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.