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 & wire rod: The prices of these longs may strengthen over August 30-September 3, as most mills are likely to raise their list prices on high production costs mainly because of coke and coking coal.

Declining stocks at the Chinese traders will be supportive to rebar price in the near term too, as by August 26, rebar inventories in the commercial warehouses of China's 132 cities under Mysteel's tracking declined for the fourth week by another 0.38% on week to 11.4 million tonnes.

Hot-rolled coil: This price may hover in the week ending September 3, as most end-users have taken on a cautious stance of buying, procuring only to fulfill immediate needs, it is encouraging, though, that by August 26 HRC stocks in the commercial warehouses of China's 55 cities reversed from two weeks of increases, down 2.1% on week to 4.17 million tonnes.

Cold-rolled coil: The price is likely to be narrowly rangebound in the week to September 3, as demand from end-users hasn't shown signs of picking up while output may dip on the other hand with some mills' maintenance on their cold rolling mills.

Medium plate: The price may incline over August 30-September 3, mainly underpinned by the improved sentiment, as most traders have been holding off selling products on remaining high steelmaking costs, and steel producers have been adjusting prices order by order.

Sections: The price is expected to hover at the present level in the week ending September 3, as traders have been and will be selling off some quantities in exchange for cash flow, though supply is expected to be limited in the near term.

On the other hand, the price of the Q235 150mm square billet in Tangshan, North China's Hebei province, has been holding well, up Yuan 40/tonne ($6.2/t) on week after one week of decline to Yuan 4,950/t EXW including the 13% VAT as of August 29.

Written by Villanelle Xia, xiayi@mysteel.com

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