Near-term outlook on China's key steel products

Below is the brief near-term outlook of the five key 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 be with modest fluctuation over December 6-10, as the demand is likely to pick up with the construction sites accelerating the pace to meet the deadlines at the yearend, but the increase in demand will be limited as these end-users will also be conscious of their cash flow with short and medium-term bank loans upon maturity around December.
  
  

Chinese steel traders have appeared cautious and have been lowering their steel stocks, as by December 2, rebar stocks at the commercial warehouses in China's 132 cities under Mysteel's tracking had declined for the eighth week by another 6.2% to 6.1 million tonnes.

• Hot-rolled coil: The steel price may soften modestly in the week ending December 10, as most end-users have procured for immediate needs, and traders appear willing to offload some volume at lower prices to minimize risks. HRC stocks at the commercial warehouses in China's 55 cities under Mysteel's survey had declined for the eighth week as of December 2 though at a slower pace of 2% to 3.1 million tonnes.
  
  
• Cold-rolled coil: The price may change little this week, as traders have replenished some stocks on the signs of price stability, and CRC stocks at the commercial warehouses in China's 29 cities under Mysteel's tracking declined the least in seven weeks as of December 2, down just 1,000 tonnes to 1.86 million tonnes, while stocks at the 29 Chinese steel mills eased too after five weeks of increases, down 4.5% to 331,100 tonnes by December 1.
  
  
• Medium plate: The price is likely to soften over December 6-10, as spot trading appeared less active in the prior week, and near-term market sentiment has been turning towards bearishness, especially when output had grown further in a tepid market as of December 1 with the output at China's 37 steelmakers under Mysteel's tracking up for the third week by 4.8% to 1.2 million tonnes.
  
  
• Sections: The price is expected to ease in the week ending December 10, as traders have been selling off at lower prices for risk management and to enrich their cash flow towards the yearend, though the price of the Q235 150mm square billet in Tangshan, North China's Hebei, increased for the third week by another Yuan 50/tonne ($7.8/t) to Yuan 4,340/t EXW including the VAT as of December 5, according to Mysteel's assessment.
  
  

Written by Villanelle Xia, xiayi@mysteel.com

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