Near-term outlook on China's steel products

• Longs prices may soften with shrinking construction demand
  
  
• HRC tags likely to fluctuate amid market uncertainties, caution
  
  

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 are likely to soften amid volatility over 18-22 November, as demand from construction enterprises may shrink modestly, while production among steelmakers remains largely stable, suggesting an intensified supply-demand imbalance. Overall market sentiment appears cautious.

Hot-rolled coil (HRC): Prices may fluctuate in the week through 22 November. Uncertainties have emerged about the domestic steel market outlook, and many market participants are cautious about the future despite the recovery in HRC fundamentals.

As of 14 November, HRC stocks held by traders in the 33 Chinese cities Mysteel monitors nationwide reached a nine-month low of 2.43 million tonnes (mnt), down by 107,800 tonnes (t) or 4.3% w-o-w.

Cold-rolled coil (CRC): Prices are expected to be narrowly range-bound in the week ending 22 November, as output will stay largely unchanged from the previous week, and end-users are likely to take some tonnage to replenish their stocks, though mainly on a need-to basis.

Medium plate: Prices will be marginally volatile over 18-22 November. A source in South China's Guangdong predicts that supplies of medium plates arriving at the local market would remain limited, though demand from end-users may also stay flat. Both production and consumption will be weak in general.

Sections: Sections' prices may remain weak this week, mainly due to slack demand, stemming from the unsatisfactory financial situation among end-users and the onset of cold winter weather across several parts of the country. As for production, most re-rollers have been operating at a break-even point, and their output of sections may decline.

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