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 soften over January 10-14, as demand from end-users will subside ahead of the Chinese New Year (CNY) holiday over January 31-February 6, and traders have stayed on the sidelines of buying on the anticipation of lower prices for winter restocking. As of January 6, rebar stocks at the 429 commercial warehouses in China's 132 cities under Mysteel's tracking had declined by a tiny 0.2% to 5.2 million tonnes.

Hot-rolled coil: This price may slip in the week ending January 14, as output has been growing amid sluggish demand from end-users. As of January 5, HRC output among the 37 steel producers under Mysteel's tracking had grown for the second week by another 3% on week to 3.1 million tonnes.

Cold-rolled coil: The price may decline this week, as stocks at the commercial warehouses are likely to mount given dull demand amid the growing supply from steelmakers. By January 5, CRC output among the 29 Chinese producers under Mysteel's survey had grown for the third week by another 5% to 816,700 tonnes.

Medium plate: The price is likely to decline over January 10-14, mainly due to the accumulation of stocks amid lukewarm spot trading activities. By January 6, plate stocks at the 217 commercial warehouses in China's 65 cities under Mysteel's survey had increased for the second week by another 1.4% to 1.8 million tonnes.

Section: The price is expected to drop in the week ending January 14, as demand from end-users is expected to fall with the earlier arrival of CNY compared to the previous year. However, the price of the Q235 150mm square billet in Tangshan, North China's Hebei province, had jumped by Yuan 130/tonne ($20.4/t) on week to reach Yuan 4,370/t EXW including the 13% VAT as of January 9, 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.