Near-term outlook on China's steel products

• Longs to strengthen amid narrowing supply-demand gap
  
  
• HRCs may stay range-bound on weak market fundamentals
  
  

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 expected to strengthen over 16-20 December, with mills' output fluctuating marginally, while demand from building contractors is likely to hover at a low level. Overall, the supply-demand imbalance for steel longs is not severe, and their inventories may decline continuously.

Hot-rolled coil (HRC): Prices may remain range-bound in the week through 20 December. HRC production has been rising recently, and its stocks held by traders in some cities have accumulated in tandem, indicating weak market fundamentals in the near term.

HRC inventories at traders' warehouses in 33 cities Mysteel tracks nationwide grew 0.8% or 17,200 t w-o-w to 2.29 million tonnes (mnt) as of 12 December.

Cold-rolled coil (CRC): Prices may be slightly volatile in the week ending 20 December. CRC output among the 29 steelmakers Mysteel samples may touch around 840,000-850,000 t this week, and demand is expected to stay largely stable.

"The market has entered a seasonal lull, and there is little room for changes in demand," informed a source, noting that market players hold a cautious stance towards future trends.

Medium plate: Prices are expected to narrowly fluctuate during 16-20 December. A source in South China's Guangdong said local traders face small destocking pressure, but demand from end-users is relatively weak. A North China-based source shared the same opinion, adding that market sentiment remains quite cautious.

Sections: Prices will be continuously affected by macroeconomic determinants in the short run, according to a market insider. He added that prices will rise further with policy support, though the pace may be limited.

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