Near-term outlook on China's steel products

MySteel Global: 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 long steel products are likely to rebound from the lows over 29 July- 2 August. The pessimistic market sentiment caused by the transition to the newly stipulated standards for hot-rolled rebar is easing moderately, and traders are holding firm on their offering prices due to high costs. Meanwhile, production and inventories of the long steel are likely to continue their downtrend.

Hot-rolled coil: This price is expected to soften amid volatility in the week through 2 August, mainly due to its high inventories and cautious sentiment in the domestic market.

HRC stocks piled at commercial warehouses in the 33 Chinese cities Mysteel tracks grew by 1.1% or 36,700 tonnes (t) on week to hit a 3.5-month high of 3.34 million tonnes (mnt) as of 25 July.

Cold-rolled coil: This price is forecast to edge down in the week ending 2 August, as mills' CRC production may persist high with the volume among the 29 steelmakers Mysteel checks across the country at around 850,000 t. In contrast, demand for this flat steel item may shrink continuously amid the slack season for steel consumption, leading to a mounting imbalance between production and demand.

Medium plate: This price may be slightly rangebound over 29 July- 2 August. In the near term, demand is expected to remain weak and market confidence may flag, according to a source based in northern China.

Inventories of medium plate held among traders in the 31 Chinese cities Mysteel checks had increased for the fifth week in a row, up by another 1.8% or 25,300 t on week to hit a two-month high of 1.47 mnt by 25 July.

Sections: The sections' prices are likely to decrease marginally this week, as steelmakers remain under pressure to reduce their inventories. The market continues to be dominated by an imbalance between mills' high output and low demand from end-users.

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