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 continue the downtrend over June 26-30, with actual demand from end-users remaining weak amid scorching temperatures and heavy rainfalls in many parts of the country while mills' production may hardly decline in the near term.

Hot-rolled coil: This price is likely to soften over June 26-30, as the hot coils output may increase on the profit margins that steel mills have still been enjoying, and thus will lead to an exacerbating imbalance between supply and demand.

The total stocks of hot-rolled coils at the commercial warehouses in 33 Chinese cities Mysteel tracks had mounted for the second week as of June 22, edging up by 2,200 tonnes on week to 2.65 million tonnes.

Cold-rolled coil: This price is forecast to be narrowly rangebound in the week through June 30, with many market participants staying on the sideline as demand from end-users have been remaining flat.

Medium plate: This price may keep largely stable in the week ending June 30, though actual demand has been slacking with slower procurement from end-users, and some traders have been adopting a pessimistic stance.

Sections: The section prices may slightly ease over June 26-30, and mills' section steel production may hover at low levels as re-rollers' profit margins have been squeezed while demand from end-users remains lackluster.

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.