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 the two long steel items are forecast to sustain the upward trend over October 30-November 3, as market confidence may be continuously bolstered by the positive signals from the macro economy, and demand from end-users is not as weak as expected.

China's national price of HRB400E 20mm dia rebar, a bellwether of the steel-market sentiment, was assessed by Mysteel at a one-month high of Yuan 3,855/tonne ($527/t) including the 13% VAT as of October 27, higher by Yuan 38/t on week.

Hot-rolled coil: This price is likely to move up in the week through November 3, thanks to an improvement in market mood. But market sources warned that production of hot-rolled coils may persist high as mills' profits would improve with the gains in steel prices, while speculative demand has not shown signs of growth and end-users are not keen to stock up the flat product in large quantities.

Cold-rolled coil: This price may be narrowly rangebound in the week ending November 3, due to the growing contradiction between production and demand.

The output of cold-rolled coils at the 29 mills Mysteel tracks nationwide rose marginally by 500 tonnes on week to total 835,600 tonnes over October 19-25, marking the third straight week of incline.

Medium plate: This price may slightly fluctuate over October 30-November 3, as the near-term demand for the plate may remain relatively weak despite the recovery in market sentiment.

Sections: The sections' prices are projected to decrease over October 30-November 3, as the stimulation from the macroeconomic news may not be sustainable while the production of sections is likely to continue to overtake demand.

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.