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: The prices of two long steel items are forecast to be largely stable over October 16-20, as market sentiment may remain gloomy with no significantly positive news emerging from domestic and overseas macroeconomic sides, while there are signs of speculative buying from market participants.

Hot-rolled coil: The decline in the prices of hot-rolled coils is likely to continue in the week through October 20, as market supply may surpass demand, leading to a further rise in HRC inventories. End-users will procure the flat product mainly to fulfill their immediate needs, and they are not keen to build up stocks.

Inventories of hot-rolled coils at the commercial warehouses in 33 Chinese cities Mysteel tracks hit an eight-month high of 3.06 million tonnes as of October 12, or climbing for the second week by 13,600 tonnes on week.

Cold-rolled coil: This price may soften in the week ending October 20 against the background of the rising imbalance between supply and demand of cold-rolled coils.

Cold-rolled coil output at the 29 steelmakers Mysteel checks nationwide may stand at around 820,000-830,000 tonnes this week.

Medium plate: This price is estimated to be narrowly rangebound over October 16-20, with many traders holding the view that the near-term outlook for the plate will be stable.

Production of medium plates among the 37 mills Mysteel surveys had fallen for the second week over October 5-11, down 22,400 tonnes on week to 1.57 million tonnes.

Sections: The sections' prices may continue to decrease over October 16-20, mainly due to weak fundamentals including the high inventories, though bearish sentiment has been gradually absorbed by the market, and the momentum of the continuous weakening in section prices has abated.

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.