How Chinese Iron & Steel Prices Performed after Golden Week Holidays ?

After the National Day holiday, domestic steel prices stopped falling and rebounded. Led by the rise in futures, spot prices began to rise. Here below are the details:

Finished steel Spot market--
Rebar prices moved up: rising. The average price of rebar HRB400E 20mm in 24 major markets in the country was RMB 4, 553/MT, up RMB 10-20/MT from the previous trading day. As the rebar futures fluctuated higher, the spot market sentiment was upbeat, the billet price rose up and finished products operate in a moderate atmosphere.

Hot rolled coil prices rising- The average price of hot rolled coils RMB 4, 250/MT, up RMB 30/MT from the previous trading day. The futures' bullish performance has formed a strong wait-and-see attitude in the downstream side, and the transactions are done on demand basis. The inventory level is normal. Considering the impact of the production restriction policy in October, it is expected that the mainstream price of the hot rolled coil will increase steadily.

Cold rolled coil prices soften: The average price of cold-rolled coils 1.0mm in 23 major markets nationwide was RMB 4, 867/MT, down RMB 50/MT from two weeks earlier. As for the market outlook, the steel market fundamentals have not improved, and the release of demand is difficult to sustain, but there is bottom support.

Raw material & semi-finished market--
Iron ore prices turn strong - Spot iron ore fines Fe 62% prices in China increased to USD 70.55/MT, CFR, up by USD 1.15 a day before amid restocking on sintering cuts. The central bank's RRR cuts coupled with the depreciation of the RMB will have a certain stimulating effect on commodities.

Domestic Billet prices strengthen: The direct shipments from the steel mill are acceptable. The billet price is up RMB50, and the overall transaction is good. Since the off-peak production during the heating season is once again raised, futures and environmental protection will jointly support the billet price, so it is expected billet prices in the short term will run strongly.

Key cities saw price upswing. The rebounding futures led to the rise of the spot market,and the market confidence enhanced with positive transactions. At present, the market showed obvious price backing under the support of high cost of goods and rebar futures price. However, the overall inventory increase during the holiday is also an indisputable fact with some traders slightly reduced profit to actively ship out goods. However, the national backlog of demand is difficult to release completely in a short time, and the market price support is still sufficient.