Near-term outlook on China's steel products
...
MySteel: 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 may strengthen over 4-8 November, mainly propped up by market expectations for macroeconomic stimulus policies. However, downstream demand for steel longs may continue to shrink, while production is expected to reach a peak and retreat, indicating a sustained imbalance in market fundamentals.
Hot-rolled coil: This price is expected to trend upward in the week through 8 November, thanks to the prevailing macroeconomic expectations. Also, downstream demand for the flat steel product shows signs of recovery with end-users' increased enthusiasm for stocking up on hot-rolled coils.
HRC stocks held by traders in the 33 Chinese cities under Mysteel's tracking have thinned for the eighth week in a row, down by 5.2% or 143,200 tonnes on week to 2.6 million tonnes (mnt) by 31 October.
Cold-rolled coil: This price will likely continue fluctuating during the week ending 8 November, as output may be largely stable, and demand will show limited change. Mysteel estimates that CRC output among the 29 steelmakers across China it checks would hover around 820,000-830,000 t this week.
Medium plate: This price may be mildly rangebound over 4-8 November. "In the short run, the market could continue to experience volatility, as many participants hold a wait-and-see stance regarding the macroeconomic outlook," said a source in northern China. Meanwhile, a source in southern China has expressed concerns about weak demand from local end-users, contributing to a low market sentiment.
Sections: The sections' prices may edge down this week. The imbalance between supply and demand would increase, as work on construction sites may slow down due to falling temperatures, according to a source based in North China's Tangshan city. Meanwhile, market sentiment appears cautious amid the soft steel prices.
Note: This article has been written in accordance with an article exchange agreement between MySteel Global and BigMint.