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 two construction steel items' prices may continue firming over July 31-August 4, as demand from end-users is likely to improve with outdoor building activities picking up, while their output may hover at low levels.

China's national price of HRB400E 20mm dia rebar under Mysteel's assessment had gained for the second week by Yuan 50/tonne ($7/t) on week to reach Yuan 3,891/t including the 13% VAT as of July 28.

Hot-rolled coil: This price may still have room for further growth in the week through August 4, mainly propped up by market participants' expectations of possible production curbing at steel mills. The contradiction between supply and demand is not obvious, and hot coil stocks at traders' warehouses have mounted, though at a slow pace.

By July 27, stocks of hot-rolled coil at the commercial warehouses in 33 Chinese cities Mysteel tracks reversed up 12,800 tonnes on week to 2.83 million tonnes.

Cold-rolled coil: This price is forecast to increase further in the week ending August 4, as demand from the manufacturing sector may stay resilient with their new orders picking up, and mills' production may persist at high levels in August.

Medium plate: This price may witness an uptick over July 31-August 4. End-users may prefer to take a wait-and-see stance toward procurement, while mills' production enthusiasm may slow down.

Sections: The sections' prices may stay on the uptrend over July 31-August 4, as market sentiment has been bolstered by the strengthening rebar futures prices and spot trading of the sections has risen as well. The section output in the northern regions of China may return to normal levels with the imminent lift of production restrictions on local re-rollers, sources said.

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.