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: Prices of the two construction steel products may be rangebound over August 7-11. Both production and demand have shown signs of weakness, with steel consumption continuously restrained by adverse weather events, while output at mills - mostly blast-furnace steelmakers - witnessed reductions last week.

As of August 4, China's national price of HRB400E 20mm dia rebar under Mysteel's assessment lost by Yuan 65/tonne ($9/t) on week to Yuan 3,826/t including the 13% VAT.

Hot-rolled coil: This price may inch down in the week ending August 11, with the imbalanced supply and demand sustaining, as the procurement of hot coils from end-users may slow down and they prefer to take a wait-and-see stance on tepid orders.

Inventories of hot-rolled coils at the commercial warehouses in 33 Chinese cities Mysteel follows mounted for the second week, rising by 41,500 tonnes on week to 2.9 million tonnes as of August 3.

Cold-rolled coil: This price is likely to narrowly fluctuate in the week through August 11, with the pressure of high production continuing while cold coil consumption from end-users slowly improving.

Medium plate: This price is forecast to gain slightly over August 7-11, with many traders holding a view that the market will be steady in the near term, despite tepid buying activities from end-users.

Sections: The sections' prices may trend downwards this week, as production among re-rollers in North China's Tangshan may return to normal levels after the curbing measures previously placed on them were lifted. Moreover, demand from end-users has been impacted by the slides in steel futures prices and heavy downpours in parts of the country.

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.