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 the two construction steel items may fluctuate and soften over May 8-12, as demand may remain bleak due to adverse weather conditions such as heavy rains and floods in some eastern and southwestern regions of China. And there is still no improvement in end-users' cashflow. Mills' production of the two longs may continue to nudge down in tandem

Hot-rolled coil: This price may stay on the downtrend in the week ending May 12, mainly due to imbalanced supply and demand. Meanwhile, hot-rolled coil (HRC) inventories are expected to mount up further.

HRC stocks held by the commercial warehouses in 33 Chinese cities Mysteel monitors grew for the fourth consecutive week, climbing by another 157,900 tonnes on week to 2.6 million tonnes over April 28-May 4.

Cold-rolled coil: The price may weaken further this week given the mounting mismatch between supply and demand. The flat downstream demand for cold coils is likely to keep weighing on prices, though the mills' output may decrease slightly during the week.

Production of cold-rolled coil (CRC) among the 29 CRC producers Mysteel follows declined 3,100 tonnes on week to total 842,700 tonnes over April 27-May 3.

Medium plate: The plate price may be narrowly volatile during this week, with demand remaining lackluster as most end-users will sit on the fence.

Over April 28-May 4, total stocks of medium plate at commercial warehouses in 33 cities nationwide Mysteel quizzes reversed up 56900 tonnes on week to 1.08 million tonnes.

Sections: The falls in section price may continue over May 8-12 though the pace is expected to slow down, while both demand and production may stay weak. This price may show a slight rebound in mid-May on re-rollers' production trimming, but the room may be limited due to feeble downstream demand.

Written by Rong Zhang, zhangronga@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.