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: These prices may stay volatile over August 14-18, as the release of demand from downstream users may still be dampened by adverse weather conditions, while mills' production is forecast to keep declining. Last week, rebar output among the 137 steel producers Mysteel tracks fell for the third week, down 1.5% on week to a 5.5-month low of 2.66 million tonnes over August 3-9. "The continuous declines in output were in line with market expectations," said a source.

Hot-rolled coil: This price may trend downward in the week through August 18, which will be pressured by a mounting imbalance between supply and demand. The stocks of hot-rolled coils piled at commercial warehouses in 33 Chinese cities Mysteel checks had accumulated for the third week as of August 10, up 13,700 tonnes on week to touch a five-month high of 2.88 million tonnes.

Cold-rolled coil: This price may be narrowly rangebound in the week ending August 18, with mills' production persisting at a high level while steel consumption from end-users steadily picking up.

Medium plate: This price may be largely stable over August 14-18, with plate procurement from end-users remaining flat as they may purchase some quantities in a bid to meet immediate needs. The dismal sentiment is estimated to permeate market participants though.

Sections: The sections' prices may decrease over August 14-18, as the pace at which demand has been recovering may slow down due to the sharp slides in steel futures lately. Though the production of section steel may inch down as some re-rollers in North China's Tangshan have seen high finished steel inventories and suffered profit losses on steel sales.

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.