Focus: Price Drivers & Key Regional Markets

Date of issue: 1 June 2026

Period covered: May 2026

1. Scope & Methodology

This report provides an objective summary of market conditions in May 2026 relevant to steel abrasives including 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 international steel scrap and hot-rolled coil benchmarks;
• China domestic steel scrap and industrial electricity cost indicators;
• Ocean freight movements on key trade lanes from China;
• RMB exchange rate movements against the USD;
• Global and regional steel demand indicators;
• Publicly available market commentary on steel production, manufacturing activity and regional demand.

Steel abrasives pricing typically follows steel scrap and flat steel trends with a lag, adjusted for energy, labour, packaging, conditioning, screening and logistics costs. All conclusions below are descriptive and do not constitute any commercial offer, quotation or investment recommendation.

2. Global Price Trends & Cost Drivers

2.1 Benchmark Price Movement

In May 2026, the global steel-related cost environment remained firm, with international steel scrap and HRC benchmarks staying clearly above levels seen in late 2025 and early 2026.

International steel scrap benchmarks continued to show upward support. The LME Steel Scrap CFR Turkey reference for May delivery was quoted around USD 412/t in late May, while forward months also stayed close to the USD 400/t level. This indicates that global scrap prices remained firm, despite regional differences in actual physical demand.

Hot-rolled coil prices also remained elevated. Global HRC indicators in May were around the USD 1,100/t level, significantly higher than mid-2025 levels. North American HRC references also remained above USD 1,000/t, suggesting that flat steel prices were still supported by supply discipline, replacement costs and regional market factors.

For steel abrasives producers, this means that the international replacement-cost reference remained high in May. However, actual steel abrasives prices did not necessarily rise at the same pace, because export competition, regional demand conditions and Chinese domestic scrap trends continued to limit the scope for broad price increases.

Overall, May can be described as a month of firm global steel input references but selective price transmission into steel abrasives.

2.2 Raw Material Costs: China Focus

From the perspective of a China-based steel abrasives producer, the two most important variable cost drivers in May 2026 remained:

• Domestic steel scrap prices;
• Industrial electricity tariffs.

2.2.1 Domestic steel scrap prices

China’s domestic steel scrap market in May was stable to slightly firm, but not sharply rising.

Mysteel’s late-May assessment showed China’s composite steel scrap price around RMB 2,525/tonne including VAT on 22 May, only slightly lower than the previous week. Market commentary indicated that finished steel weakness created some downward pressure on scrap prices, but firm steelmaker demand for scrap provided support.

This suggests that China’s domestic scrap market in May was balanced but not strong:

• Finished steel prices were under pressure in some segments;
• Mills continued to purchase scrap selectively;
• Scrap yards and qualified suppliers still held inventories at relatively high levels;
• Demand from steelmakers helped prevent a sharper fall.

For scrap-based steel abrasives plants, the implication is that domestic scrap did not create strong new upward cost pressure in May. Compared with the international scrap market, China’s domestic scrap trend was more moderate. This created a partial buffer for Chinese producers, even while international benchmarks remained high.

In short, China domestic scrap prices in May can be characterised as stable with mild two-way pressure: not low enough to support aggressive price cuts, but not strong enough to force large price increases.

2.2.2 Industrial electricity tariffs

Electricity remains an important cost component in steel abrasives production, especially for melting, heat treatment, conditioning and screening processes.

Available public data suggest that China’s industrial power prices remained broadly stable and internationally competitive in May 2026. There were no major nationwide tariff shocks reported during the month. China’s business and industrial electricity prices continued to sit within a relatively stable range compared with late 2025 and early 2026.

For steel abrasives producers, this means:

• Electricity was a stable background cost;
• There was no sudden power-cost shock requiring immediate product price adjustments;
• Regional tariff differences still exist, but they did not change the overall cost direction in May.

Taken together, China’s raw material and power-cost environment in May was neutral to mildly supportive. Domestic scrap remained stable, and electricity costs were steady. This helped Chinese producers maintain a relatively stable RMB cost base, although export margins were still affected by freight and exchange-rate movements.

2.3 Energy & Environmental Policy Impact: China Focus

In May 2026, energy and environmental factors did not create a direct cost shock for China-based steel abrasives producers. The impact was mainly indirect, through industrial energy stability, environmental inspections and continued steel-sector capacity discipline.

Industrial energy costs remained broadly stable.

China’s industrial electricity tariffs showed no major nationwide increase during May. For steel abrasives production, this means that power-related costs for melting, heat treatment, conditioning and screening remained a stable background factor, rather than a new source of price volatility. Coal and gas costs also did not create a sudden nationwide cost shock for most downstream metal-processing plants.

Environmental inspections remained targeted rather than disruptive.

Routine environmental and safety inspections continued in some industrial regions, but there was no evidence of large-scale nationwide production disruption directly affecting steel abrasives plants. For most producers, the impact was therefore local and operational, not broad enough to trigger a general price increase.

Steel-sector capacity control remained an indirect support for upstream prices.

China has continued to regulate crude steel output and restrict illegal capacity additions as part of its broader industry-upgrading and emissions-control strategy. This type of policy does not directly raise the cost of steel abrasives production, but it helps prevent excessive steel supply from pushing upstream steel prices sharply lower. Reuters reported that China plans to continue regulating crude steel output and prohibit illegal new capacity additions during 2026–2030.

For steel abrasives producers, the practical conclusion is:

• Energy cost: broadly stable, with no sudden power or gas shock;
• Environmental inspections: targeted and localised, not market-wide;
• Capacity control: indirectly supportive for upstream steel price stability, but not a direct cost driver.

Overall, energy and environmental policy in May 2026 can be described as neutral to mildly supportive for costs. It did not add strong new upward pressure to steel abrasives production costs, but it remained an important background factor supporting upstream steel price discipline.

2.4 Logistics & Exchange Rates – China Focus

For Chinese exporters of steel abrasives, logistics and exchange rates became more important in May than in the previous few months.

Ocean freight from China

Container freight rates strengthened noticeably in May. Drewry’s World Container Index increased for several consecutive weeks and reached around USD 2,800 per 40ft container by 28 May. The increase was driven mainly by Asia–Europe and Transpacific routes.

Shanghai to Rotterdam and Shanghai to Genoa rates moved higher, supported by early peak-season demand and higher FAK levels. Transpacific rates also increased, with Shanghai to Los Angeles and Shanghai to New York both rising during the month. Carriers continued to use blank sailings and higher surcharges to manage capacity and lift market levels.

For Chinese steel abrasives exporters, this means:

• The FOB-to-CFR gap widened in May;
• CFR quotations became more sensitive to destination and shipping schedule;
• Buyers in distant markets, especially Europe and North America, faced higher landed costs;
• Freight became a more important variable in quotation validity and shipment timing.

Compared with February and March, when freight had softened, May represented a clear shift back toward upward logistics pressure.

RMB exchange rate

The RMB continued to strengthen against the USD in May. By late May, USD/CNY was around the 6.80–6.82 range, compared with levels above 6.90 earlier in the year and above 7.00 at the end of 2025.

For exporters pricing in USD, a stronger RMB creates margin pressure because each USD of export revenue converts into fewer RMB. Unless foreign-currency prices are adjusted, exporters must absorb part of this currency movement.

In summary:

• Freight: higher, increasing landed costs;
• RMB: stronger, compressing exporter margins;
• Combined effect: mild to moderate pressure on export pricing, especially for CFR/CIF quotations.

Overall, logistics and FX were less favourable for Chinese exporters in May than they had been in February–March.

2.5 Demand-Side Factors by Segment

The broader steel demand environment in May remained uneven, with stabilisation at the global level but clear differences by region and application.

The World Steel Association’s latest short-range outlook indicates that global steel demand is bottoming out over the 2025–2026 period, with modest growth expected in 2026 and stronger growth projected for 2027. China’s demand contraction is slowing, while key developing markets, especially India, remain the main growth drivers.

From an abrasives perspective, demand by segment can be summarised as follows:

Shipbuilding & steel structures

Demand from shipbuilding, steel structures, bridges, tanks and heavy fabrication remained relatively stable. These applications continue to support base consumption of steel shot and steel grit for plate and profile blasting.

However, demand is not uniform across regions. Growth markets with active infrastructure and energy projects showed better momentum, while mature markets remained cautious.

Foundries & castings

Foundry activity remained mixed. Some export-oriented foundries in developing markets maintained steady production, while foundries in weaker industrial economies continued to control inventory and purchase abrasives on a more cautious basis.

Buyers remained focused on actual blasting cost, media durability and consumption rate, rather than only the price per tonne.

Automotive & machinery

Automotive and machinery-related demand remained selective. High-value manufacturing and equipment sectors performed better in parts of Asia, while traditional machinery demand in some developed markets stayed soft.

This led to stable but not aggressive demand for steel shot, steel grit and cut wire used in peening, cleaning and surface preparation.

Stainless & aluminium finishing

Demand for stainless steel shot and conditioned cut wire remained relatively stable in applications involving stainless components, aluminium castings, die-cast parts and non-ferrous finishing. Export-oriented hubs in India, Vietnam and selected ASEAN economies continued to show comparatively better activity.

Overall, demand in May was best described as stable but not strong. It helped prevent deep price cuts, but it was not strong enough to support broad and aggressive price increases.

3. Key Regional Market Overview

3.1 Europe

Europe remained a cautious market in May.

Steel demand in Europe is expected to gradually improve, but industrial activity is still facing pressure from high production costs, trade frictions and weak external demand. Steel abrasives consumption in Europe was therefore stable but conservative.

Shipyards, structural steel fabricators and maintenance-related users continued to consume abrasives at normal operating levels. However, many buyers remained focused on inventory control and avoided speculative purchasing.

The increase in Asia–Europe freight rates in May also affected landed costs for imported steel abrasives. As a result, European buyers became more sensitive to shipment timing, quotation validity and total delivered cost.

Local pricing for standard high-carbon steel shot and grit was generally stable, but new CFR offers from Asia became more exposed to freight increases.

3.2 Asia-Pacific

Asia-Pacific continued to show divergent trends.

China

China’s domestic steel demand remained weak, mainly due to property-sector pressure and softer construction-related activity. Manufacturing PMI data also showed that China’s factory activity stalled in May, with new export orders contracting and input costs still elevated.

For domestic steel abrasives demand, this means there was no strong pull from heavy industry. Many producers continued to rely on export markets and stable long-term customers.

India and developing Asia

India remained one of the strongest steel-demand growth markets. Infrastructure, rail, energy, automotive and manufacturing investment continued to support demand for steel products and related surface preparation media.

Vietnam and selected ASEAN markets also showed relatively good activity, especially in export-oriented manufacturing, fabrication and component finishing. These markets continue to offer better demand momentum for steel shot, steel grit, stainless shot and conditioned cut wire.

Japan and Korea

Japan and Korea remained stable but subdued. Demand was supported by high-quality manufacturing, automotive, machinery and maintenance activities, but volume growth was limited. Buyers remained focused on consistent quality, clean surface results and reliable supply.

3.3 Middle East & Africa

The Middle East and Africa remained important long-term growth regions, although the market environment in May was affected by geopolitical and logistics uncertainty.

Infrastructure, oil & gas, tank, pipeline and industrial construction projects continued to support demand for blasting media. However, freight volatility and regional uncertainty made buyers more cautious about shipment planning.

In this region, buyers continued to value:

• Stable quality;
• Reliable delivery;
• Correct documentation;
• Predictable landed cost.

The higher freight environment in May increased attention to shipment consolidation and order timing.

3.4 Americas

North America

North American steel-related benchmarks remained firm, especially HRC. This supported a stronger cost reference for local steel and steel-related products.

Steel abrasives demand in North America was steady but cautious. Infrastructure, energy, maintenance and fabrication projects continued to support base consumption, while some distributors avoided excessive inventory build-up due to price and demand uncertainty.

Central & South America

Central and South America remained project-driven. Demand from fabrication, mining, ship repair, construction and maintenance continued, but purchasing decisions were influenced by currency movement, freight cost and cash-flow considerations.

Buyers in the region remained sensitive to CFR pricing, because changes in ocean freight and local currency can significantly affect final landed costs.

4. Short-Term Outlook: June–July 2026

Looking ahead to June–July 2026, and assuming no major macroeconomic or geopolitical shock, the steel abrasives market is likely to remain within a relatively narrow but firmer range.

Overall price band

Steel abrasives prices are expected to remain generally stable to slightly firm in the next one to two months.

There is no strong signal for a sharp global price surge, because demand remains mixed and China domestic scrap prices are not rising aggressively. However, the downside is also limited because:

• International scrap and HRC benchmarks remain firm;
• Ocean freight has moved higher;
• The RMB remains stronger against the USD;
• Upstream steel supply remains disciplined.

As a result, the most likely scenario is small and selective price adjustments, rather than broad price increases or deep cuts.

Implications for buyers

For buyers, May’s market signals suggest that the key issue is not only the steel abrasives price per tonne, but the full landed and operating cost.

In June–July, buyers may need to pay closer attention to:

• Validity period of CFR/CIF quotations due to changing freight;
• Exchange-rate impact on USD quotations from Chinese suppliers;
• Product durability and consumption rate;
• Total blasting cost per square metre or per component;
• Shipment timing before further freight increases.

For regular users, maintaining a reasonable safety stock may be more practical than waiting for a large price decline. For distributors, careful planning of shipment consolidation and destination freight may help reduce landed-cost volatility.

This concludes the May 2026 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.