Posted on 03 Sep 2025
Chinese steel prices are expected to continue tracking lower in September, reflecting the persistently weak fundamentals in domestic ferrous markets, Mysteel's chief analyst Wang Jianhua predicts in his latest monthly outlook.
Last month, domestic steel prices lost ground overall under the pressure of ample supply, with China's national composite steel spot price standing at Yuan 3,521/tonne ($494/t) including the 13% VAT as of August 29, lower by some 1.5% from the end of July, according to Mysteel's assessment.
Despite summer's hot and damp weather causing steel demand from end-users to wane, domestic steelmakers kept their production running high last month to chase profits, Mysteel's survey showed.
For example, during the week over August 21-27, output of the five major carbon steel products among the 184 steel mills across China under Mysteel's regular tracking totalled 8.8 million tonnes, higher by a remarkable 13.6% compared with the same period last year.
Entering this month, domestic steelmakers are unlikely to reduce production to any great extent as most mills were still enjoying favorable profit margins, Wang suggests.
By the end of August, around 64% of the 247 blast furnace (BF) steelmakers under Mysteel's other tracking said they could make some profits on selling their steel products, substantially higher than the pitiful 3.9% of mills answering positively at the same time last year.
Although many BF mills in North China had been required by local governments to halt operations late last month to improve air quality in the region, these mills will restart production during the first two weeks of September, according to Wang.
On the other hand, demand for Chinese steel products is likely to decline overall in September, impacted mainly by the encumbered international steel market, Wang warned.
"The steady decline of container export freight shows that steel demand from end-users overseas is shrinking," he pointed out. The China Containerized Freight Index, a barometer of China's container export market published by the Shanghai Shipping Exchange, had touched a more than two-month low at 1156 by the end of August, Wang noted.
"Overseas demand has been a crucial pillar supporting China's steel market this year," he stressed. "As the US tariff hikes continue for an extended period – and are compounded by the additional tariffs on steel and aluminum products effective from August 18 – the pressure on China's steel exports will intensify, and steel prices will be dragged lower," he added.
Moreover, cost support for steel prices is expected to waver this month as the overvalued prices of raw materials such as iron ore and coke are likely to retreat, Wang noted.
On August 29, Mysteel assessed China's national coke spot price at Yuan 1,455/t, higher by 12.2% from the end of July, while the PORTDEX index for 62% Australian Fines in Qingdao had increased by 2.4% on month to reach Yuan 782/wmt FOT, both including the 13% VAT.
"The weakening of steel prices will squeeze steelmakers' profit margins and press them to pare back their input costs this month," Wang believed.
Source:Mysteel Global
