July Price Review:
In July, domestic grain-oriented silicon steel prices showed a rise-then-pullback trend. From early to mid-month, supported by rigid demand from downstream transformers and orders from new energy and ultra-high-voltage projects, mainstream grades such as B23R085 shot up to period highs. However, high prices continued to curb downstream purchase willingness, market trading turned subdued, and at month-end spot prices fell under pressure, ending the rally. In light of long-term expectations, the market generally believed that this round of price spikes had come to an end.
Fundamental Analysis:
In August, overall production schedules at domestic grain-oriented silicon steel mills were broadly flat compared with July, and the production side remained at elevated operating rates, with no significant tightening in the pace of supply release. In terms of product mix, output remained dominated by high magnetic induction HIB grain-oriented silicon steel, while the share of ordinary CGO grain-oriented silicon steel stayed persistently low. Output levels of the two categories changed little from July, and steel mills had not proactively carried out concentrated production cuts. The sustained high-level supply release continued to weigh on the spot market, clearly restraining further price increases.
In June, new installations of different power sources showed clear divergence, providing structural support for GO silicon steel demand. New thermal power installations remained high on a YoY basis, while step-up transformers and station auxiliary transformers for thermal power continued to generate rigid demand for GO silicon steel. Hydropower new installations rose substantially, releasing demand for main and auxiliary transformers for hydropower. Wind and solar power new installations were weaker than in the same period of previous years, and increments for new energy-related box-type and main transformers were limited. Nuclear power new installations pulled back, and demand for special GO silicon steel for nuclear power weakened in stages. Overall, in June, conventional power source construction gained momentum, with thermal and hydropower installations contributing the main growth and supporting orders for large power transformers, which in turn drove demand for high-grade GO silicon steel. Insufficient growth in wind and solar installations partially offset some of the demand growth, leaving demand in a structural pattern of strong conventional power and weak new energy.
August Price Outlook:
Looking ahead to August 2026, on the supply side, China's GO silicon steel supply is expected to edge down slightly in August. Mainstream state-owned steel mill production lines are expected to largely maintain high-load operation, while some private enterprises will carry out minor maintenance, leaving overall supply relatively stable. Although GO silicon prices pulled back in July, most steel mills' profits are still acceptable; in addition, mainstream mills such as Baowu raised August GO silicon steel base prices by 50 yuan/mt, showing a clear intention to hold prices firm. Overall production willingness remains moderate, and high-end grade resources are being released steadily. However, supply of ordinary-grade material is relatively ample, resulting in market inventory pressure. On the demand side, China's 15th Five-Year Plan ultra-high-voltage projects continue to be implemented, and transformer companies are prioritizing ultra-high-voltage-related orders. Demand for high-grade GO silicon steel for grid-connected new energy transformers remains resilient. However, the impact of the August high-temperature off-season is becoming apparent, with most downstream companies mainly restocking to meet rigid demand. There is a lag in converting State Grid and China Southern Power Grid tender orders, and proactive stockpiling willingness is not strong. In addition, India's anti-dumping investigation into Chinese GO silicon steel is still underway; blocked exports have caused resources to flow back, continuing to hit the Chinese market and keeping prices under pressure. Cost side, hot-rolled coil prices are expected to consolidate on a weak note in August, with sustained upward momentum remaining insufficient and the monthly average price continuing to move lower MoM. In summary, SMM expects grain-oriented silicon steel prices to consolidate on a subdued note in August 2026, with high-end grades relatively resilient and ordinary grades under more visible pressure.
Data source statement:
(Data in this report other than public information are all sourced from public information (including but not limited to industry news, seminars, exhibitions, corporate financial reports, broker reports, National Bureau of Statistics data, customs import and export data, and various data published by major associations and institutions), market communication, and SMM's internal database models, and are produced by the research team through comprehensive analysis and reasonable inference; they are for reference only and do not constitute decision-making advice.)
SMM reserves the final right of interpretation of the terms of this statement and the right to adjust and amend the content of the statement according to actual circumstances.
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