Steel Mills to Raise Prices amid Weak Demand for Silicon Steel

SHANGHAI, Jan 28 (SMM) - During the Chinese New Year (CNY) holiday, the silicon steel market was closed, and the quotations of traders after the holiday were flat compared with those before. Most traders in Shanghai and Wuhan returned to work today, apart from a small number of traders who planned to return to work on January 30. The majority of traders in Guangzhou will return to work on January 29 and 30.

In the foreseeable future, mainstream steel mills are inclined to increase prices due to high costs. SMM expects that the steel futures prices of mainstream steel mills in March will continue to rise. As for traders, they are facing greater cost pressure amid rising quotes of steel mills and the potential of further increase. As such, their profits might turn poor again. With regard to demand, since downstream and terminal enterprises generally restocked in advance based on the expectations for an increase in post-holiday prices, the terminal demand in February is expected to run at a low level. The overall purchasing enthusiasm will thus be weak.

On the whole, although mainstream steel mills are likely to raise their prices, the sluggish purchasing willingness of downstream and terminal companies will subdue the momentum of silicon steel spot prices in February. Therefore, silicon steel prices are estimated to remain firm or rise slightly in February.