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 these two long steel products are likely to decrease over 12-16 August, as market expects insufficient support from the cost front. This week, destocking of long steel will continue with production declining further and demand hovering low. Meanwhile, the market mood will stay cautiously pessimistic.

Hot-rolled coil: This price is expected to fall amid fluctuations in the week through 16 August, due to the continuous softening of downstream demand despite mills' output reduction. HRC stocks held among commercial warehouses in the 33 Chinese cities Mysteel tracks mounted for the third straight week, higher by 2.5% or 83,800 tonnes (t) on week to 3.49 million tonnes (mnt) as of 8 August.

Cold-rolled coil: This price is forecast to remain on the downward trend in the week ending 16 August. "Currently, retail CRC stocks are at a high level with many traders suffering poor sales, so most traders choose to cut prices to facilitate more sales and alleviate inventory pressure," a source said.

Medium plate: This price may stay mildly range-bound over 12-16 August. End-users will not be keen to procure this flat material due to their own poor sales, while traders also show reluctance to stock up steel plates amid bearish sentiment, according to a source in northern China.

Sections: The sections' prices may largely lose ground over 12-16 August, due to the sustained imbalance between production and demand, despite the fact that many mills have curtailed their output or suspended operations for maintenance. Demand from building contractors may shrink further due to their cashflow problems and seasonal low consumption.

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