Analysis of Raw Material Price Trends for Prestressed Steel Strand in October

Entering October, ex-works prices of prestressed steel strand have edged slightly higher, running somewhat counter to the overall direction of the cost side. The main reason is that price declines at the upstream raw material level have not been smoothly transmitted to the processing segment. Steel mills remain generally loss-making, and the cost relief released by cheaper raw materials has been absorbed first to repair their own margins, rather than passed downstream. As a result, the actual wire rod purchase prices faced by strand producers have not fallen in tandem. The following sections review October's raw material price movements across four dimensions — iron ore, coking coal and coke, billet and scrap, and wire rod.

I. Iron Ore Continues to Weaken

Iron ore marks the starting point of the current softening in raw material prices. The futures main contract has retreated continuously from its late-September high, with the decline extending into October after the National Day holiday, posting a notable cumulative drop. The price index moved lower in tandem, while spot quotes for mainstream imported fines at major ports also eased modestly from earlier levels.

The logic behind the weakness is fairly clear. On the supply side, overseas miners maintain high shipment and arrival volumes, and port inventories remain elevated for the season with slow destocking. On the demand side, less than 10% of steel mills are profitable; blast furnace maintenance has increased, hot metal output is running low, and procurement is confined to immediate needs. With the supply-demand balance generally loose, ore prices are more likely to fall than rise, making iron ore one of the more reliably soft variables on the raw material side this October.

II. Coking Coal and Coke: Spot Prices Retreat

Coke is the steepest decliner this month, yet futures and spot are moving in opposite directions — the spot gauge must govern. After a deep September selloff, the futures main contract staged a sharp single-day rebound in early October before easing back. That rebound reflects a valuation repair following an earlier steep futures discount to spot, not a genuine revival in physical demand.

On the spot side, however, price cuts have come in successive rounds. Two rounds have already been implemented within October, with meaningful cumulative reductions for both wet-quenched and dry-quenched coke, pushing benchmark first-grade dry-quenched coke in major producing regions to a period low. The coke index moved lower accordingly, while coking coal stayed soft under supply-assurance policies. Notably, the industry still anticipates room for further cuts within the month, suggesting the cost decline has not yet run its full course and the floor may still have some way to go.

III. Billet and Scrap Both Soft

For billet, Tangshan common square billet prices are trending weakly lower, and market expectations for its October trading range are likewise conservative. On the supply side, blast furnace operating rates remain high and merchant billet volumes have increased, while on the demand side, rolling mills run at low utilization and purchase cautiously. This pattern of rising supply against falling demand keeps prices under pressure. As for scrap, the national average price for heavy scrap edged up slightly month-on-month, but mills have shown little enthusiasm for post-holiday restocking, with some already trimming their purchase prices — leaving no basis for a one-sided rally.

On the whole, the fuel and semi-finished segments together form a downward pull on the cost side this October, moving in the same direction as iron ore.

IV. Wire Rod Holds Steady

As the most direct raw material, 82B wire rod has charted an independent course against the broadly weaker upstream backdrop, holding flat for two consecutive pricing rounds in October. Leading mills kept their quality wire rod list prices unchanged for both the early and mid-month cycles, with other major producers following suit and the "change vs. previous period" column reading zero. In the north, mainstream spot resources stabilized after a small pre-holiday adjustment; in the south, delivered prices including tax held steady; and the north-south spread remained stable. Regional settlement prices rose slightly from the previous month.

The reason wire rod has not followed raw materials lower lies in the loss cushion at the mills. With over 90% of steel mills previously in the red and rebar losses per ton running at elevated levels, the savings from cheaper raw materials have gone first toward repairing mill margins, and have yet to be transmitted to the specialty wire rod segment. Raw material easing, therefore, does not automatically imply lower wire rod prices.

Summary

Taken together, October's raw material landscape presents a tiered pattern: the fuel segment is broadly loosening, billet and scrap are softening in step, and wire rod is holding range-bound. Iron ore and coke spot prices are both weakening, with the overall cost center shifting lower and no floor yet confirmed. 82B wire rod, constrained by mill margin repair, is likely to stay range-bound in the near term.