Price Stabilization with Mixed Adjustments in Building Materials

On September 9, 2025, China's building steel market is expected to experience price stabilization with minor adjustments, fluctuating within a range of -10 to 10 yuan. This follows a pattern where major steel enterprises mostly lowered their prices on the previous trading day. Despite a slight increase in engineering demand PMI to 51.5 (up 2 percentage points day-on-day), terminal users are purchasing cautiously based on immediate needs. Factors influencing this trend include volatile futures, with the night session seeing a slight decline, and logistical challenges due to heavy rain forecasts in regions like South China, Southwest China, and East China. Additionally, the first round of coke price reductions of 50-55 yuan/ton has been implemented in Hebei and Shandong.

India's Steel Industry Advocates for Minimum Import Price

Despite the Indian government imposing a 12% temporary safeguard duty on imported steel, domestic steel prices remain under pressure. In response, Indian steel manufacturers are urging the government to implement a minimum import price (MIP). Industry executives argue that the existing tariffs are insufficient to support the domestic market amidst falling global prices. This move aims to provide stronger protection for local producers against cheap imports.

Green and AI Initiatives Take Center Stage

The Steel Conclave 2025, held in India on September 8-9, focused on integrating artificial intelligence (AI) into the steel value chain and financing the green transition. Key attendees included Union Steel Minister H.D. Kumaraswamy. The Indian government's recent decision to reduce the GST on renewable energy products from 12% to 5% is expected to accelerate the industry's shift away from coal, which currently accounts for about 85% of its energy consumption. This tax cut is significant as the steel sector uses roughly 20% of India's total industrial energy.

In a significant move towards sustainable production, Vardhman Special Steels Limited (VSSL) and Japan's Aichi Steel Corporation (ASC), a Toyota Group member, are investing $284 million in a new green steel plant in Ludhiana, Punjab. The facility, which will use energy-efficient Electric Arc Furnace (EAF) route technology to melt scrap metal, aims for an annual capacity of 500,000 metric tonnes. It will primarily supply the automotive sector and is planned to be fully powered by a dedicated solar facility, making it one of India's first projects committed entirely to green steel production.

Technological Breakthrough in China

Chinese metallurgical company Anshan Iron & Steel Group (Ansteel) has successfully commissioned a pilot line for producing green iron using renewable energy and green hydrogen at its plant in Bayuquan. The pilot line, with an annual capacity of 10,000 tons, produced direct reduced iron (DRI) with a metallization rate of 95% in late August. This process avoids carbon-intensive coking and sintering stages. Ansteel plans to promote an industrial-scale demonstration project with a capacity of 500,000 tons per year, building a complete green steel supply chain from hydrogen production to end-use.

Raw Material Market Fluctuations

The raw material market is seeing mixed trends. The Mysteel import iron ore 62% Australia粉矿index rose by 0.9 to 105.25 USD/dry ton. However, coke prices have seen a reduction. Simultaneously, China's steel exports in August were 951.0 million tons, a decrease of 3.3% from the previous month, though the total for the first eight months of the year saw a 10% year-on-year increase.

The global steel industry is navigating a complex landscape of price volatility, trade protectionism, and a significant push towards sustainable and AI-driven manufacturing processes.