China Steel Weekly Analysis: Hot-Rolled Coil Prices Rise 1.1% on Policy Support

## Weekly Overview
This week (Aug 26–31, 2026), China steel prices advanced across all five major categories, driven by steady infrastructure investment and favorable upstream cost conditions. The DSP Shanghai spot market showed consistent upward momentum, with hot-rolled coil and rebar leading gains. The week closed with positive sentiment as downstream demand held resilient amid policy tailwinds from national infrastructure spending.

### Weekly Averages
| Product | This Week (¥/ton) | Last Week (¥/ton) | Change | % Change |
|---|---|---|---|---|
| Rebar | 3,615 | 3,561 | ▲54 | +1.5% |
| Hot-Rolled Coil | 3,522 | 3,482 | ▲40 | +1.1% |
| Cold-Rolled Coil | 4,080 | 4,038 | ▲42 | +1.0% |
| Medium Plate | 3,880 | 3,813 | ▲67 | +1.8% |

## DSP Composite Index
The DSP Composite Index stood at 961.05 as of Aug 14, posting a daily gain of +0.22%. Over the past 20 trading days, prices have fluctuated between consolidation and gradual recovery, with medium plate showing the strongest weekly performance (+1.8%).

## Trend Analysis
China steel prices experienced a broad-based rise this week, supported by multiple fundamental factors. According to Mysteel (source: mysteel, 2026-08-30), the national average prices for all five major steel categories increased sequentially — rebar +67 yuan/ton, HRC +54 yuan/ton, and medium plate +51 yuan/ton over the full week — confirming the upward trend observed in DSP data.

**Infrastructure demand remains a key driver.** The National Development and Reform Commission has accelerated the "Six Networks" and "Two Major Projects" construction initiatives, while transport fixed-asset investment reached ¥18,152 billion in Jan–Jul (source: mysteel, 2026-08-30). This ongoing capital expenditure underpins steel consumption in construction and transportation sectors.

**Upstream costs provided support.** Qingdao port iron ore prices rose by ¥2/ton on Aug 31, with 61.6% PB fines at $900/ton and 60.8% PB fines at $697/ton (source: mysteel, 2026-08-31). Tangshan billet traders reported steady but modest transaction volumes, with ex-warehouse prices at ¥3,120/ton incl. tax. Tangshan Songting Steel raised billet ex Works prices by ¥20 to ¥3,060/ton (source: mysteel, 2026-08-31), adding cost support to downstream mill pricing.

**Supply-side adjustments were mixed.** Three steel mills entered maintenance this period: WuKun Steel reduced wire rod output by 20,000 tons starting Sep; Quanzhou Ming Guang's September maintenance affects 65,000 tons; Xinjiang Kunlun Steel cut rebar output by 2,500 tons/day (source: mysteel, 2026-08-30). However, these reductions were partially offset by continued production from major producers including Baosteel and Xingtai Steel projects coming online.

**Rolling mill price increases reinforced sentiment.** Shandong Xinghan raised GI sheet ex Works prices by ¥40 on Aug 31 to ¥3,980/ton for 1.0mm specimens (source: lange, 2026-08-31), while Donghai Cold Rolled Base Material increased prices cumulatively by ¥25, with Q195L SPHC quoting at ¥3,300/ton and ¥3,320/ton respectively (source: lange, 2026-08-31). These manufacturer price moves signal confidence in near-term demand.

## Outlook
**Base case (probability: 60%) — Moderate prices with cautious optimism:** With infrastructure spending continuing to provide structural demand support and upstream raw material costs remaining elevated, we expect China steel prices to hold firm to slightly higher into next week. Medium plate is likely to lead gains given its strong weekly performance (+1.8%). Procurement windows for overseas buyers remain open, particularly for HRC and rebar lots at current FOB levels.

**Bullish upside scenario (probability: 30%) — Further cost-push rally:** If the Albemarle Chile union strike proceeds as voted (97.49% in favor, earliest start Sep 2), affecting approximately 190–230 tons/day of lithium carbonate output (source: mysteel, 2026-08-31), broader commodity supply concerns could spill over into steel input cost inflation. Additionally, China's shipbuilding order book capturing nearly 80% of global new orders could sustain plate demand. In this scenario, medium plate and HRC could test higher FOB levels ($620+/ton for MP, $560+/ton for HRC).

**Downside risk (probability: 10%) — Demand weakens ahead of autumn slowdown:** If seasonal demand tapering outpaces infrastructure drawdown, inventory accumulation at traders could pressure spot prices. However, current inventory levels and policy momentum make a sharp decline unlikely.

## Procurement Strategy
- **Hot-Rolled Coil:** Current FOB ~$549/ton represents a reasonable entry point for Q4 delivery contracts. Consider locking in 50–60% of planned volumes now, with the remainder deferred to monitor infra spending news flow.
- **Medium Plate:** Strongest weekly performer (+1.8%); if your project timeline allows, consider forward purchasing at current levels before potential cost-driven upside in early September.
- **Rebar:** Price stability combined with rising infrastructure capex makes this an attractive procurement window for long-lead projects. Average price of ¥3,615/ton (FOB ~$554/ton) is competitive vs. regional benchmarks.
- **Cold-Rolled Coil:** GI sheet and cold-rolled base material price increases suggest mill confidence. Monitor auto and appliance demand signals (auto retail down 22% YoY; home appliance Sep production down YoY) before committing large volumes.

## Market News
• **Iron ore prices edged up at Qingdao port** — PB fines and block ore quotes rose by ¥2/ton on Aug 31;贸易商报价积极性一般 (merchants cautious), but cost support remains (source: mysteel, 2026-08-31). *解读：铁矿石成本支撑温和上行，对成材价格构成底部支撑。*

• **Tangshan billet raised by ¥20** — Tangshan Songting Steel lifted普方坯 to ¥3,060/ton ex works (source: mysteel, 2026-08-31). *解读：钢坯调价反映钢厂挺价意愿，为下游成材提供成本支撑。*

• **Three steel mills entered maintenance** — WuKun (−20kt wire rod), Quanzhou Ming Guang (−65kt), Xinjiang Kunlun (−2.5kt/d rebar) from late Aug onwards (source: mysteel, 2026-08-30). *解读：检修减量虽有限，但缓解了短期供给压力，对价格形成支撑。*

• **Shandong Xinghan raised GI sheet by ¥40** — 1.0mm specs at ¥3,980/ton incl. tax (source: lange, 2026-08-31). *解读：镀锌板调价反映下游涂镀市场信心改善，冷轧链价格有上行动能。*

• **Donghai cold rolled base material up ¥25** — Q195L at ¥3,300/ton, SPHC at ¥3,320/ton (source: lange, 2026-08-31). *解读：冷轧基板跟涨，显示上游原料对冷轧价格形成传导效应。*

• **Albemarle Chile strike vote passed** — 97.49% of workers voted in favor, possible strike from Sep 2 affecting ~190–230 t/d lithium carbonate output (source: mysteel, 2026-08-31). *解读：虽为锂矿而非直接钢铁原料，但矿山罢工情绪可能外溢至大宗商品整体，推升避险情绪与成本预期。*

• **China shipbuilding orders capture ~80% of global total** — Strong order book sustains medium plate demand outlook (source: mysteel, 2026-08-30). *解读：船舶订单旺盛为中厚板需求提供中长期支撑，是采购决策的重要参考因素。*

• **Traffic infra investment hit ¥18,152B in Jan–Jul** — Road investment ¥12,011B, water transport ¥1,255B (source: mysteel, 2026-08-30). *解读：持续的基础设施投资为建筑钢材需求提供结构性支撑，是价格上行的核心驱动。*

## Data Disclaimer
Data source: DSP database (Shanghai spot prices, DSP index, USD/CNY rate). Prices are for reference only.