[SMM Analysis] Oriented Silicon Steel Prices May Remain Stable with a Downward Bias Next Week, Substantial Improvement in Demand Difficult in the Short Term

Price Dynamics of Grain-Oriented Silicon Steel

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

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

This week, grain-oriented silicon steel prices in the Shanghai market fluctuated rangebound, with overall mediocre market trading activity. Most traders reported no significant improvement in the transaction pace WoW. From the core market logic perspective, the futures' weak performance was the main driver of short-term price fluctuations, while the interplay between supply and demand imposed two-way constraints, keeping the overall market within a range-bound pattern.

Price-wise, the market showed clear structural divergence. Resources from state-owned steel mills, benefiting from stable quality reputation and relatively controlled release pace, maintained firm prices with support, with mainstream grade quotations unchanged WoW; some tight specifications even saw slight firming intentions. In contrast, private resources had some room for negotiation to boost transaction activity, but limited by cost support, actual discounts were minimal, and overall quotes maintained a certain spread compared to state-owned resources.

Supply-demand contradictions continued to stand out. On the supply side, overall market supply was relatively tight. Some state-owned mills, due to full order books earlier, faced significant production scheduling pressure, leading to extended delivery cycles and low market circulation volume. Private mills maintained normal production but adopted a cautious shipment pace to control inventory risks, further exacerbating shortages of certain specifications. Demand side performance remained weak, with major downstream industries such as motors and transformers still in the traditional off-season. Enterprise order releases fell short of expectations, procurement was mainly for rigid restocking, and bulk purchase orders were rare, providing insufficient boost to market prices.

Trader sentiment was generally cautious, with most focusing on inventory digestion. Ordering plans emphasized small batches and high frequency to avoid capital pressure from blind stockpiling. Currently, market participants are widely watching futures trends and the pace of downstream demand recovery, showing little willingness for active price adjustments.

Overall, next week's market prices are expected to continue a stable-to-weak trend. Substantial improvement in demand is unlikely in the short term, leaving prices lacking upward momentum.

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