It is said from analysts that steel prices in China still fall path after the National Holiday, and commercial stockpiles, especially that of sheet products, have increased by a large margin.

China’s top steel maker the Baosteel Group, the parent company of Baosteel (600019.SH), announced last Saturday to cut its November prices by 250 yuan to 500 yuan/ton, and to offer discounts on particular products in October.

According to Baosteel’s November pricing policy, prices of thick plates, ship plates and boiler container steel will be cut by 400 yuan to 500 yuan/ton; straight carbon hot-rolled products by 400 yuan/ton; machine use products by 400 yuan per ton; pickling products by 250 yuan/ton; hot-rolled galvanized zinc, electro galvanized zinc, color-coated sheets, and electric steel will be cut by between 300 and 400 yuan/ton. Meanwhile, the company will give compensation of 100 to 350 yuan/ton for ordering hot-rolled and cold-rolled products in October.

Although prices are falling, steel plants are reluctant to limit production proactively, because the up-stream fuel prices and hence their production costs are also dropping.

Currently, trading volumes are sluggish, as there is very much a wait-and-see atmosphere.