Near-term outlook on China's steel products

• Long steel prices may rise amid tightened supply
  
  
• HRC tags to fluctuate as supply pressure recedes
  
  

Mysteel Global: Below is the brief near-term outlook for five key steel products Mysteel shares on a weekly basis, drawing upon the results of related surveys and communication with Chinese market participants.

Rebar, wire rod: Prices of these two long steel items may strengthen over 2-6 December. Steelmakers may scale back production further due to thinning profit margins on long steel sales, and demand from end-users may shrink as well.

Mysteel's weekly survey among the 137 mills it tracks nationwide showed that their total rebar output during 21-27 November hit a 1.5-month low of 2.28 million tonnes (mnt), lower by 2.5% w-o-w.

Hot-rolled coil: Prices are projected to stay volatile in the week through 6 December, against the backdrop of reduced output and resilient demand. "Supply pressure has been relatively low recently, HRC inventories are thinning, and stockouts in certain specifications are common in some cities," said a source.

HRC stocks held by traders in 33 cities continued the fall that began in mid-September, down by 4% w-o-w to a 10-month low of 2.27 mnt as of 28 November.

Cold-rolled coil: Prices are likely to waver in the week ending 6 December, as weekly output may remain largely stable at around 830,000-840,000 tonnes (t), while demand will show a seasonal lull with market participants acting cautiously towards trading.

Medium plate: Prices are expected to be narrowly range-bound during 2-6 December. A source in Guangzhou, the capital city of South China's Guangdong province, said although inventories of medium plates at local traders' warehouses have hovered at low levels, the actual demand from downstream users is rather poor.

Medium plate stocks with traders in 31 cities declined for an eighth straight week, down by 2.6% w-o-w to 1.11 mnt by 28 November.

Sections: Prices may move up this week. Some building enterprises across China have been stepping up the procurement of steel sections to facilitate their work on construction sites as the year-end approaches. Meanwhile, market expectations for positive macroeconomic signals are also likely to underpin the prices. On the supply side, mills' steel section output may stay largely unchanged from the previous week.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.