China Steel's Wire Price for Oct. and Nov. Remains Flat

China Steel's domestic sales price for October and November opened higher. Most of the downstream companies express that the price increase is expectable, but that the increase margin should be re-evaluated. The new hot-rolled steel price climbed by around USD 25/ ton. Because the cumulative increase margin of re-rollers' Oct.-Nov. foreign sales price stays lower than USD 20/ ton, re-rollers say bluntly that they cannot accept the increase despite they can understand China Steel's standpoint. Although the wire rod price remain unchanged this time, screw and nut companies report that currently they are having a bad time getting small screw POs, and they think there is still room for lowering the price.

Considering the increase margin of steel plants in Mainland China, some downstream companies atsy neutral and think that China Steel has already revised the margin for a milder price increase, and that the increase is within expectation. In addition, Q4 is the peak season in the industry, and this time China Steel announces the double-month sales price; thus the price rise should boost goods circulation in the market (otherwise a small increase margin will result in the industry staying on the sidelines).

Wire rod companies think the unchanged wire rod price for Oct.-Nov. is within expectation. However, according to some wire and screw companies, there is room for lowering the wire rod price due to lower customer demand and the industry will strive to keep the price unchanged in response to China Steel, but they cannot gurarntee the outcome because the industry is still conservative towards Q4.