[SMM Analysis] Market Divergence: There is Still Room for Price Reduction in Non-oriented Electrical Steel from Private Enterprises Next Week

Price Trends of Non-oriented Electrical Steel

Shanghai B50A800 grade: 4,900-4,950 yuan/mt

Wuhan 50WW800 grade: 4,600-4,700 yuan/mt

Guangzhou B50A800 grade: 4,450-4,550 yuan/mt

Shanghai Market:

This week, the price of cold-rolled non-oriented electrical steel in Shanghai continued to decline, with overall market transactions remaining average. The ferrous metals series futures market held up well this week, but long-term expectations for finished steel prices are downward, still exerting a negative impact on the non-oriented electrical steel market. On the fundamental side, the supply of spot resources for some state-owned medium and low-grade non-oriented electrical steel in Shanghai remained tight. Coupled with poor market expectations, traders had low willingness to stockpile, primarily purchasing as needed, and only placing orders when customers had clear demands. Overall inventory levels were low. Meanwhile, demand remained sluggish, with average transaction activity and a strong bearish sentiment in the market. Terminal users were cautious in their purchases, and downstream demand from the automotive and home appliance industries for non-oriented electrical steel showed limited growth. Looking ahead, market conditions are expected to remain average, with insufficient growth in downstream demand. The market is generally cautious and waiting to see how things unfold. It is expected that next week, the prices of state-owned non-oriented electrical steel resources in Shanghai will undergo narrow adjustments, while private resources are still expected to see price reductions.

Wuhan Market:

This week, the spot price of cold-rolled non-oriented electrical steel in Wuhan remained stable, with market transactions being average. On the fundamental side, there was no increase in the supply of state-owned non-oriented electrical steel resources, especially for medium and low grades. The spot supply in the market remained tight, but current market demand was also weak. Traders had low willingness to place orders, purchasing as needed, with overall inventory levels remaining low and the overall trading atmosphere being sluggish. Looking ahead, the off-season in the market is still ongoing, with low transaction activity. However, state-owned enterprises have a strong reluctance to budge on prices. It is expected that next week, the price of non-oriented electrical steel in Wuhan may undergo narrow adjustments.

Guangzhou Market:

This week, the price center of cold-rolled non-oriented electrical steel in Guangzhou shifted slightly downward, with a sluggish trading atmosphere in the spot market. The ferrous metals series futures market held up well this week, but failed to stimulate market confidence. On the fundamental side, most traders expected the market to be in a downtrend, with spot transaction activity continuing to decline. There was insufficient willingness to purchase non-oriented electrical steel, and inventory levels were at historical lows. However, constrained by the traditional off-season, downstream terminal users had low willingness to purchase, forcing traders to reduce prices to sell goods. Looking ahead, the current market presents a pattern of weak supply and demand. Low inventory levels provide some support to prices, but market sentiment is bearish and lacks price-driving factors. It is expected that next week, there will still be some room for price reductions in non-oriented electrical steel in Guangzhou.