Focus: Price Drivers & Key Regional Markets
Date of issue: 31 December 2025
Period covered: December 2025
1. Scope & Methodology
This report provides an objective summary of December 2025 market conditions relevant to steel abrasives (cast steel shot, cast steel grit, stainless steel shot and conditioned cut wire).
Because there is no dedicated global price index for steel abrasives, price assessments in this report are based on:
- Movements in scrap steel and flat steel (HRC) benchmarks; (Trading Economics)
- Trends in ocean freight rates on key trade lanes (Asia–Europe, Asia–US), using Drewry’s World Container Index and related sources; (drewry.co.uk)
- Exchange rate developments for RMB vs USD/EUR; (OFX (US))
- Global and regional steel demand indicators from the World Steel Association and other industry commentary; (worldsteel.org)
- Publicly available information on China’s steel and scrap markets (Mysteel and others). (我的钢铁)
Steel abrasives pricing typically follows steel scrap and HRC trends with a lag, adjusted for energy, labour, packaging and logistics costs. All conclusions below are descriptive and do not constitute any commercial offer or quotation.
2. Global Price Trends & Cost Drivers
2.1 Benchmark Price Movement
In December 2025, major steel-related benchmarks showed a pattern of moderate firming, continuing the trend seen in November:
- Global ferrous scrap:
LME’s Steel Scrap CFR Turkey (Platts) contract for December delivery was around USD 370/t on 25 December, versus roughly USD 355–360/t levels indicated in late November futures/assessments – implying a further 3–4% month-on-month rise and extending the Q4 recovery in international scrap prices. (Lme)
- Hot-rolled coil (HRC):
Global HRC prices continued to climb: one widely used index put HRC around USD 935/t on 30 December, up about 3.5% over the past month, and well above mid-year levels. US Midwest HRC futures for December traded consistently around USD 905–910/t, signalling a relatively firm floor in key developed markets. (Trading Economics)
Taken together, underlying steel input costs in December moved modestly higher again. For steel abrasives producers, this adds incremental upward cost pressure compared with October – November, though not yet to a level that forces universal list-price increases. Pricing behaviour remains selective rather than aggressive in most regions.
2.2 Raw Material Costs (China Focus)
From the perspective of a China-based producer, the two most important variable cost drivers in December 2025 were:
- Domestic steel scrap prices, and
- Industrial electricity tariffs.
2.2.1 Domestic steel scrap prices
Mysteel’s December reporting shows that China’s composite steel scrap price continued to soften slightly, but the pace of decline slowed compared with November:
- At the end of November, Mysteel assessed China’s national steel scrap price at about CNY 2,409/t (incl. 13% VAT), about 1.3% lower than a month earlier. (我的钢铁)
- As of 12 December, the composite steel scrap price stood near CNY 2,404/t, only 0.4% lower week-on-week, reflecting a smaller retreat than in November. (我的钢铁)
- Subsequent weekly notes through late December highlighted a pattern of “prices softening again”, “slightly rebounding” and then “stable with mills’ stocks rising”, indicating that the market was searching for a floor rather than entering a sharp down-cycle. (我的钢铁)
In practical terms, this points to roughly flat to slightly lower average scrap prices in December vs November, with the monthly average likely just below November’s level.
For scrap-based steel abrasives producers in China, December’s scrap trend can be summarised as:
- Additional but small cost relief compared with November;
- A market that is weak but orderly, with no collapse in scrap prices and ongoing supply discipline from major mills.
2.2.2 Industrial electricity tariffs
For steel abrasives production, electricity remains a significant but smaller cost component than scrap. Public data and tariff surveys suggest that China’s industrial power prices in late 2025 were broadly stable:
- Country-level comparisons put average industrial/business power prices in China around CNY 0.79/kWh (≈ USD 0.11) in early 2025, still competitive versus many other manufacturing locations. (drewry.co.uk)
- Other international sources estimate the average industrial electricity cost at about USD 0.088/kWh in 2024, with no sign of a major step-change in 2025. (Lme)
- City-level tariff data for 35 kV and above users (e.g. Chengdu, Chongqing) in late 2025 show rates typically in the CNY 0.54–0.62/kWh range, remaining within the historical band of the last two years. (CME Group)
There were no nationwide Q4 electricity-tariff hikes reported that would materially change the cost base for abrasives plants. For December specifically:
- Scrap: continued slight softening, adding modest cost relief;
- Electricity: stable, acting as a steady background cost.
Overall, raw material and power costs in China exerted mild downward to neutral pressure on the steel abrasives cost base in December, partially offset by rising international benchmarks (HRC, imported scrap).
2.3 Energy & Environmental Policy Impact (China Focus)
Energy and environmental factors in December 2025 continued to influence the upstream steel environment, mainly via production controls and structural policy signals, rather than through direct price shocks:
- Crude steel output & policy direction
Recent data show that China’s crude steel output in November was about 69.9–69.87 Mt, down roughly 10.9% year-on-year, marking the sixth consecutive monthly decline and pointing to total 2025 output about 4% lower than 2024 and at its lowest since 2018. (worldsteel.org)
At the same time, policymakers have pledged to continue regulating crude steel output and prevent illegal capacity additions during 2026–2030, reinforcing the message of **long-term supply discipline and decarbonisation. (Reuters)
- Environmental inspections & winter lull
December is traditionally a winter lull for China’s ferrous market. Mysteel’s monthly scrap report emphasised that, after a steady slide in November, scrap prices would face further downward pressure in December, but that resilient demand for scrap would offer support, limiting the downside. (我的钢铁)
Environmental inspections and operating-rate adjustments continued in certain regions, but these were gradual and targeted, not disruptive.
For steel abrasives producers, this translated into:
- No abrupt increase in energy costs in December;
- Ongoing structural constraints on crude steel output, which help prevent a deep collapse in flat-steel prices, even in a weak demand environment.
In short, energy and environmental policy in December 2025 remained neutral to mildly supportive for costs—limiting downside for upstream steel prices while not imposing significant new cost burdens on abrasives producers.
2.4 Logistics & Exchange Rates (China Focus)
For Chinese exporters of steel abrasives, December’s key external variables were:
- Rising container freight rates from Chinese ports;
- A stronger RMB against the US dollar, in the context of a generally weaker USD.
2.4.1 Ocean freight from Chinese ports
Drewry’s World Container Index (WCI) moved decisively higher through December:
- On 18 December, the WCI jumped 12% in a single week to about USD 2,182 per 40ft container. (drewry.co.uk)
- By 25 December, it rose again to USD 2,213/FEU, marking the fourth consecutive weekly increase and a clear rebound from levels around USD 1,800 seen earlier in Q4. (drewry.co.uk)
The increase was driven mainly by higher rates on Transpacific and Asia–Europe routes, which are crucial for steel abrasives exports. (Container News)
For typical FOB Qingdao shipments, this means that December freight offers were noticeably higher than in November, widening the FOB-to-CFR gap and exerting upward pressure on landed costs in distant markets (especially Europe and North America).
2.4.2 RMB exchange rate vs USD
Currency markets in late 2025 were dominated by a weakening US dollar:
- Reuters notes that the USD has fallen about 9.6% on a trade-weighted basis in 2025, its steepest annual drop in eight years. (Reuters)
- The renminbi has appreciated almost 4% vs the USD in 2025, with the PBoC recently fixing the RMB at around 7.03 per dollar, its strongest level in about 15 months, signalling tolerance for a somewhat stronger currency. (金融时报)
High-frequency data show:
- The USD/CNY monthly average fell from about 7.11 at end-November to roughly 7.05 by late December, and spot rates in the last week of December briefly dipped below 7.00, with intraday lows around 6.99. (OFX (US))
For Chinese exporters of steel abrasives, this implies:
- Freight: higher container rates in December increased the logistics cost burden vs November;
- FX: a stronger RMB slightly compressed RMB-denominated margins on USD-priced exports.
Overall, logistics and FX developments in December 2025 had a mildly negative impact on export margins, partially offsetting the modest cost relief from domestic scrap, and contributing to upward pressure on CFR price levels in some destinations.
2.5 Demand-Side Factors by Segment
The World Steel Association’s October 2025 Short Range Outlook still frames the broader backdrop: global steel demand in 2025 is projected to be broadly flat vs 2024 (≈1.75 billion tonnes), with a 1.3% rebound expected in 2026. (worldsteel.org)
By end-December, incoming data and commentary largely confirmed this stabilisation picture:
- China:
China’s steel demand is expected to continue declining by about 2% in 2025, though the rate of decline is moderating. The property sector remains weak, while exports have played a key role in absorbing surplus production. (worldsteel.org)
- India & developing markets:
India remains the main demand growth engine, with Worldsteel projecting around 9% annual steel demand growth in both 2025 and 2026, supported by infrastructure and manufacturing investment. Selected ASEAN and MENA economies (e.g. Vietnam, Egypt, Saudi Arabia) also show above-average demand growth. (worldsteel.org)
Segment-wise implications for abrasives:
- Shipbuilding & steel structures: Steady infrastructure and energy projects support relatively stable demand for plate and profile blasting media in many regions.
- Foundries & castings: Activity remains mixed; some export-oriented foundries see better orders, while others face weak machinery and equipment demand and keep abrasives consumption tightly aligned with current orders.
- Automotive & machinery: Cost pressures and soft final demand in several major economies continue to limit aggressive restocking of abrasives.
- Stainless & aluminium finishing: Export-oriented hubs in India, Vietnam and parts of ASEAN continue to see steady to mildly improving consumption of stainless cut wire and stainless shot for non-ferrous and stainless finishing.
In summary, December did not bring a major shift in global demand: conditions remain “stabilising but not yet strong”, which helps prevent deeper price cuts but does not justify broad-based price hikes for steel abrasives.
3. Key Regional Market Overview
3.1 Europe
Demand:
Europe’s steel industry remains under pressure, with output and demand far below pre-2008 levels, and high energy costs plus import competition weighing on margins. (Le Monde.fr)
However, Worldsteel expects EU steel demand to bottom out in 2025 and return to modest growth in 2026, supported by infrastructure and defence spending. (expometals.net)
Applications & behaviour:
In December, steel abrasives consumption in Europe was seasonally quiet but broadly stable:
- Shipyards and structural fabricators maintained essential blasting activity,
- Some foundries and machinery producers advanced year-end maintenance and stock checks rather than new projects.
Buyers continued to place smaller, more frequent orders, focusing on inventory control. Local abrasives prices for standard high-carbon shot and grit were mostly unchanged vs November, with occasional discounts in highly competitive tenders.
3.2 Asia-Pacific
The Asia-Pacific region continues to show strong contrasts:
China
Crude steel output in China has declined sharply year-on-year and is heading for its lowest annual level since 2018, as domestic demand—especially in property—remains weak. (Reuters)
For steel abrasives, this translates into stable to slightly softer domestic demand, with no strong pull from heavy industry and a continued shift towards export-oriented business.
India & fast-growing developing markets
India’s steel demand is projected to grow around 9% in both 2025 and 2026, and remains the bright spot in global steel demand. (worldsteel.org)
This underpins healthy abrasives demand for construction steel, pipe mills, general fabrication and automotive suppliers. Some ASEAN economies (such as Vietnam) also show solid growth, driven by foreign investment and export-oriented manufacturing. (thecoalhub.com)
Japan & Korea
Steel demand in Japan and Korea is forecast to remain subdued, even as domestic producers expect relatively stable demand in some sectors. (worldsteel.org)
Abrasives usage here is generally steady but unspectacular, with strong focus on quality, consistency and local supply reliability.
Price competition in Southeast Asia remains intense, as buyers compare local vs imported abrasives and react quickly to FX and freight changes.
3.3 Middle East & Africa
Demand:
Several MENA countries – notably Saudi Arabia and Egypt – remain key demand growth centres, driven by large infrastructure, energy and industrial projects. (thecoalhub.com)
This continues to support solid base demand for steel abrasives used on construction steel, tanks, pipelines and heavy plate.
Market behaviour:
Buyers place high value on reliable quality, predictable shipment and documentation, but are sensitive to freight and lead time, especially as December’s container rates moved higher. For some projects, suppliers and buyers have had to re-negotiate delivery windows or shipment splits to manage freight cost spikes.
3.4 Americas
North America
In the US, steel demand is projected to bottom out in 2025 and show modest growth in 2026, in line with the global SRO. (worldsteel.org)
December abrasives demand was steady but cautious:
- Infrastructure and energy projects maintained core usage,
- Some distributors reduced year-end inventories, delaying replenishment into early 2026.
Ferrous scrap and HRC levels remained elevated relative to mid-year, helping stabilise steel abrasives price expectations.
Central & South America
Latin America is expected to deliver around 5–6% steel demand growth in 2025, but from a historically depressed base. (expometals.net)
Currency volatility in some countries continues to influence purchasing timing: non-urgent abrasives purchases may be postponed when local currencies weaken, while urgent project-driven demand remains.
4. Short-Term Outlook (January–February 2026)
Bringing the above factors together:
- Raw materials:
Global scrap and HRC benchmarks ended December higher than at the start of Q4, but the pace of increase has slowed. Unless there is a new shock, they are likely to exert moderate, not extreme, upward cost pressure into early 2026. (Trading Economics)
- China cost base:
Domestic scrap looks close to a short-term floor, while electricity tariffs remain stable. This suggests a relatively steady RMB cost base for Chinese steel abrasives producers entering 2026.
- Logistics & FX:
Container freight rates have rebounded from earlier lows, and the RMB has strengthened alongside a weaker USD, adding some pressure to exporters’ margins. The direction of freight and FX will be important risk factors in Q1 2026. (drewry.co.uk)
- Demand:
Global steel demand in 2025 is stabilising at around 1.75 billion tonnes, with modest growth expected in 2026, driven mainly by India and selected developing economies. Developed markets appear to be near the bottom of the current cycle. (worldsteel.org)
Base case (no major shocks):
- Steel abrasives prices in most regions are likely to remain within a narrow band in January–February 2026.
- Where adjustments occur, they are expected to be small and selective, for example:
- Slight upward revisions on grades most exposed to rising international scrap/HRC and higher freight;
- Targeted discounts or promotions in highly competitive local markets or where freight has eased.
- Regional differences will mainly reflect local demand strength, freight conditions and currency movements, rather than any single global pricing trend.
This concludes the December 2025 steel abrasives market overview.
The report is intended solely as a neutral summary of public market information and does not constitute a price quotation, commercial offer or investment recommendation.