Baoshan Iron and Steel Co., Ltd., also known as Baosteel, a subsidiary of state-run China Baowu Steel Group, decided to further raise its domestic base prices of most main steel products by 100-200 yuan/t for October bookings.

These steel products include hot-rolled coil and sheet, heavy plate, cold-rolled coil and sheet, pickled steel, and hot-dip galvanized coil.

Baosteel's pricing decisions are generally regarded as a bellwether for the industry. The firm had lifted prices by 50 yuan/t for August and September bookings each. The latest move to further adjust up the price levels for October reflects the company's optimistic outlook about the finished steel market during the month.

Spot prices for domestic steel products moved higher over the past month. On September 10, the price of Shanghai HRB 400 rebar (20 mm) was 3,240 yuan/t, up 140 yuan/t month on month, while that for Shanghai hot-rolled coil (3.0 mm) stood at 3,410 yuan/t, up 100 yuan/t from a month ago. The Tangshan Q235 billet price increased by 110 yuan/t to 3,040 yuan/t.

Steel product prices rebounded from low levels in late August as expectations for the peak season in September and October heated up and feedstock cost support emerged, though steelmakers' overall profit margins remained constrained.

Since August, coking coal prices have been rising steadily, and five rounds of coke price hikes have been implemented quickly since late August. The tight supply-demand balance for iron ore is unlikely to change in the near term, reinforcing cost support.

September is a traditional consumption peak. As weather cools, construction activity accelerates, and demand for construction steel is expected to see a release. On the manufacturing side, the "Golden September" is also a peak production period for automobiles and home appliances, which will support plate demand.

However, close attention must be paid to downstream funding availability and real estate completion data. If demand falls short of expectations, spot steel prices will face downward pressure.

Baosteel's heavy plates are mainly used in shipbuilding, offshore platforms, boilers, pressure vessels, pipelines, high buildings, bridges and heavy-duty trucks, etc., while hot-rolled steel products are widely used in ships, automobiles, bridges, buildings, machinery, and pressure vessels and other industrial applications.