Near-term outlook on China's steel products

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: The prices of these two long steel items may show signs of stabilizing over April 17-21, as their output may modestly decline due to thinner or even negative profit margins among mills, while demand from end-users may stay largely stable.

As of April 14, China's national price of HRB400E 20mm dia rebar, a bellwether of Chinese steel-market dynamics, had lost Yuan 86/tonne ($12.5/t) on week to Yuan 4,100/t including the 13% VAT, according to Mysteel's assessment.

Hot-rolled coil: This price may fluctuate downwards in the third week of April with speculative demand and restocking needs among market participants barely recovering, while HRC inventory may not continue to decline on week despite the possible fall in production.

Cold-rolled coil: The price may slip in the week ending April 21, mainly due to the continuing imbalance between demand and supply. As of April 12, production among 29 cold-rolled coil producers in China under Mysteel's tracking increased by another 8,900 tonnes on week to 859,200 tonnes.

Medium plate: The price is forecast to be narrowly range-bound this week, and output may also slightly fluctuate. By April 12, production of medium plate among 37 plate makers Mysteel checks nationwide thinned further by 9,400 tonnes on week to 1.47 million tonnes, chiefly because mills' production enthusiasm had been dampened due to their squeezed profit margins.

Sections: The price may edge up over April 17-21, mainly on the support of replenishment needs from end-users as their stocks at hand had declined previously with softening steel prices. On the other hand, output of sections may remain stable this week.

Written by Rong Zhang, zhangronga@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com

Note: This article is being written in accordance with an article exchange agreement between Mysteel Global & Steelmint.