WEEKLY: 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 the two long steel products are likely to soften amid volatility over January 13-17. Output may trend downward further with mini-mills across China gradually ceasing production for the upcoming Chinese New Year holiday, and the cost support may retreat further as well. In addition, traders prefer to clear their stockpiles of the steel longs ahead of the holiday.

Rebar production among the 137 steelmakers sampled by Mysteel sat at a 3.5-month low of 1.99 million tonnes over January 2-8, falling for a third consecutive week by 3.2% or 66,000 tonnes.

Hot-rolled coil: This price is expected to weaken in the week through January 17. A South-China's Guangdong-based market insider stated HRC stocks held by local traders have started to accumulate due to the slack demand from end-users, while many traders have shown limited zeal for building up steel inventories for this winter.

HRC inventories held among traders in the 33 Chinese cities Mysteel monitors reversed up by 3.3% or 74,900 tonnes on week to reach 2.33 million tonnes as of January 9.

Cold-rolled coil: This price is forecast to fall in the week ending January 17, with output inching down and demand easing further. Meanwhile, traders now are active in lowering their CRC stocks at hand. They also predict that the space for market changes before the long holiday will be rather limited.

Medium plate: This price may be narrowly rangebound during January 13-17, with production fluctuating slightly and demand staying weak, according to a source in northern China. He believes that trading activity in the spot market will contract further as the holiday gets closer, and traders tend to be cautious regarding the near-term market outlook.

Sections: Prices of steel sections may lose ground this week. On the one hand, most re-rollers have suspended operations for maintenance due to their high steel stocks and thin margins. On the other hand, demand from building contractors decreases further as workers are gradually leaving construction sites for early holiday breaks.

Note: This article has been written in accordance with an article exchange agreement between MySteel Global and BigMint.