China: Steel Prices Move Up in Domestic Market

As the market opened today, the mainstream quotation of construction steel in Shanghai market has increased slightly. Heading towards the weekend, the transaction atmosphere in the market is not very active and the overall shipment performance was ordinary.

In terms of varieties, according to the data, wire rod today is slightly up. Currently, the specification 6.5-10mm by Jiujiang and Zenith plants is quoted at RMB4,000-4,060/ton; the mainstream resources of rebar HRB400 inched up: at present, the price of specification 18-22mm by Zenith and Shente is mostly seen at RMB3,820-3,860 /ton. The mainstream price of the rebar HRB400E has moved up slightly. At present, the price of specification 18-25mm by Zenith and those in Wuhu are is prevalent at RMB3,850-3,890/ton.

The average daily output of crude steel in China is 2,587,300 tons in November, and the added value of industrial enterprises above designated size increased by 5.4% in November.

As market opened today, price of construction steel in Shanghai market raised RMB10-20 / ton out of inertia, whereby the rebar price by big factories is reported at RMB3,820-3,860/ ton. After market opening, the rebar futures continued to rise and the market was more positive. However, today's trading performance was ordinary as enthusiasm for procurement was weakened following the price uptick. At present, the market inventory is at a low level, and the shortage of specifications is more striking. Considering the suspension of steel production in Xuzhou, Jiangsu province for half a month, market sentiment is significantly boosted. Coupled with a rising rebar futures, it is expected that construction steel price in Shanghai market will fluctuate upward in the short run.

In addition, from the perspective of the futures market, rebar today fluctuated upwards, and the main contract 1905 finally closed at RMB3,445 / ton, up RMB56 / ton from the settlement price of previous working day.

The low level of inventory formed strong support for the current price, the spot market is more prone to go up, it is expected that price of construction steel in Shanghai market will fluctuate upward in the short term.