[SMM Analysis] Concentrated Bearish Sentiment Released, Price Decline of Oriented Silicon Steel Slows Down

Oriented Silicon Steel Price Update

Shanghai B23R085 grade: 12,500-12,700 yuan/mt

Wuhan 23RK085 grade: 12,400-12,600 yuan/mt

This week, the cold-rolled oriented silicon steel market extended its earlier decline and the drop widened; trading remained sluggish. The earlier bearish sentiment driven by expectations of new capacity and weak demand gradually materialized, and the mindset of traders and end-users shifted markedly. From late August to early September, oriented silicon steel was oversupplied; traders reached a consensus to cut prices and offload stocks proactively, while downstream end-users waited for lower prices and postponed purchases. The fundamental supply-demand imbalance was pronounced, and a synchronized bearish mood drove oriented silicon steel prices sharply lower.

Looking ahead, the release of new capacity on the supply side is slower than expected; state-owned producers such as Baosteel and Shougang Group maintain unchanged output. On the demand side, tenders for 110 kV and above transformers from State Grid and inverter demand from new-energy power stations are both increasing, partly offsetting weakness in traditional industrial demand. After the sharp decline from late August to early September, prices for high-grade material from state-owned producers have begun to stabilize; the earlier concentrated bearish sentiment has been released, and the mindset of traders and downstream end-users has shifted from panic-driven wait-and-see to cautious bargaining. Coupled with an easing supply-demand imbalance, the pace of price declines in oriented silicon steel will slow markedly and gradually transition to a pattern in the doldrums. In summary, next week the cold-rolled oriented silicon steel market is expected to see a further slowdown in the pace of price declines, with overall performance remaining in the doldrums.

Data Source Statement: Except for publicly available information, all other data are derived by SMM from public information, market communication, and SMM’s internal database model for reference only and do not constitute investment advice.

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