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 strengthen over 26-30 August mainly due to the recovery in demand from end-users and reduced production among steelmakers. Also, the news that Beijing is suspending new steel-production 'capacity swap' plans has buoyed market sentiment to some extent.

Hot-rolled coil: This price is expected to soften further in the week ending 30 August. "Currently, mills' HRC output remain at a high level, and inventories of this product held by traders in some cities continue to mount," said a source in north China. "This suggests a continuous imbalance between production and demand," he further said.

HRC production among the 37 Chinese mills under Mysteel's tracking gained by 3% or 89,000 tonnes (t) on week to 3.1 million tonnes (mnt) as of 21 August.

Cold-rolled coil: This price may stay weak in the final week of August. End-users mainly replenish CRC for their immediate needs, and their procurement is highly affected by market sentiment. The imbalance between high production and low demand still exists in the domestic CRC market.

Medium plate: This price is estimated to be narrowly range-bound over 26-30 August. The overall market sentiment may waver with many traders not willing to stock up medium plates in large quantities due to a slack demand from downstream users.

Sections: The sections' prices may stabilise at low levels this week. Production of steel sections may remain subdued as mills conduct more maintenance works due to their squeezed margins, while demand for sections still appears weak with traders and end-users acting cautiously towards buying.

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