Near-term outlook on China's steel products

• Longs prices to stabilise amid limited market pressure
  
  
• Weak production, demand may keep HRC tags volatile
  
  

Mysteel: 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 products are expected to stabilise over 6-10 January, as traders are reluctant to further reduce their offers to facilitate sales. The accumulation of stocks seems relatively slow, suggesting limited pressure on the long steel market.

Rebar stocks at trading warehouses in 35 Chinese cities under Mysteel's tracking reversed up by 3.2% or 88,300 tonnes (t) w-o-w to 2.87 million tonnes (mnt) as of 2 January.

Hot-rolled coil: Prices are forecast to fluctuate further in the week through 10 January, due to continuing weak production and demand. A source in South China's Guangdong province said local retail hot-rolled coil (HRC) stocks thinned again and persisted at low levels last week, which could lend some support to spot prices.

HRC inventories held among traders in the 33 Chinese cities Mysteel monitors declined for the second week, down 0.7% or 14,900 t w-o-w to 2.25 mnt by 2 January.

Cold-rolled coil: Prices are likely to be narrowly range-bound in the week ending 10 January. Demand for cold-rolled coils (CRCs) may stay flat with the Chinese New Year holiday getting closer, and traders would rather hold onto their low stockpiles.

Mysteel estimates that CRC production among the 29 mills it follows will hover around 850,000 t this week.

Medium plate: Prices will fluctuate in a narrow band during 6-10 January. The market sentiment has turned cautious, with traders showing a disinclination to stock up on medium plates in the winter season, while demand from end-users has been shrinking significantly as well.

Stocks of medium plates held by traders in the 31 cities Mysteel checks nationwide decreased for the second week, down 5,500 t w-o-w to 1.1 mnt by 2 January.

Sections: Prices of steel sections may remain largely stable this week, as demand is expected to fall in the wake of slowing work on overall building projects. Some re-rollers may halt their production for maintenance works due to meagre margins and high inventories.

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