Near-term outlook on China's key steel products

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

Rebar and wire rod: The prices of these longs may increase over August 16-20, mainly underpinned by improving demand, as China's end-users are likely to stock up some tonnage ahead of September-October, a traditional peak season for domestic steel consumption.

Besides, dwindling rebar stocks may lend some support to the price, as by August 12, rebar inventories in the commercial warehouses of China's 132 cities under Mysteel's tracking declined for the second week, down 84,000 tonnes on week to 11.6 million tonnes.

Hot-rolled coil: This price may soften in the week ending August 20, as sluggish demand from end-users has led to the build-up in stocks, and by August 12, HRC stocks in the commercial warehouses of China's 55 cities recovered after just one week of decline, up 2% on week to 4.2 million tonnes.

Cold-rolled coil: The price is likely to slip in the week to August 20, as most end-users, with fewer new orders, may reduce the replenishment, and supply may increase as some rolling mills will resume production after the maintenance.

Medium plate: The price may strengthen over August 16-20, mainly underpinned by anticipated better demand from end-users such as construction sites and for structural steel, while output reversed from a one-week recovery in the second week of August.

Sections: The price is expected to be narrowly rangebound in the week ending August 20, as spot trading has appeared lukewarm. Besides, the support from the semis may be limited, as by August 15, the price of the Q235 150mm square billet in Tangshan, North China's Hebei province, recovered from one-week fall, up Yuan 10/tonne ($1.5/t) on week to Yuan 5,090/t EXW including the 13% VAT.

Written by Villanelle Xia, xiayi@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.